Click HERE to watch Senator Collins’ remarks
WASHINGTON, D.C. – Senator Susan Collins, Majority Leader Mitch McConnell, Senator Ron Johnson, and NFIB President Dan Danner held a news conference today to highlight critical small business tax relief that is part of the Protecting Americans from Tax Hikes (PATH) Act of 2015. This legislation will soon be considered by the Senate.
Three critically important tax incentives authored by Senator Collins have been included in the PATH Act, including a provision that would make small business expensing a permanent feature of the tax code at $500,000. Known as Section 179, it allows small businesses to deduct from their annual tax obligation up to $500,000 for the cost of new equipment, machinery, technology and other capital upgrades. If Congress fails to extend this provision, the maximum deduction amount will drop to $25,000.
During the news conference NFIB CEO and President Dan Danner said, “Voting to make 179 permanent is one of the most crucial actions Congress can take in 2015 to help small business. It’s a tax benefit that encourages small businesses to invest in their own growth, which every member of the Senate would agree the country needs. Making that provision permanent has been our top priority for years and we’re very grateful to Majority Leader McConnell, Senator Johnson, and Senator Collins for their strong support.”
In her remarks, Senator Collins stated that when she “talks to small businesses in Maine, their number one complaint to me is that they never know what the tax code is going to be, and thus they tend to freeze their investment decisions, and therefore their job creation… the ramifications of having certainty and ending the unpredictability in our tax code for these three vital small business provisions will help to create many more new jobs for our economy.”
Senator Collins also spoke from the Senate Floor today to underscore the importance of these provisions for our small businesses.
According to the NFIB Research Foundation, permanent small business expensing would increase economic output by almost $19 billion and create nearly 200,000 jobs over the next 10 years.
See below for a copy of Senator Collins’ remarks from the News Conference:
Back in April, I introduced a bill to extend section 179 expensing, to extend the bonus depreciation provision, and to extend an expired provision that allows restaurants and retailers to depreciate their improvements and equipment over 15 years rather than a very unrealistic 39 years. I’m absolutely delighted that all three of these important provisions have been included in the tax bill that we will vote on tomorrow.
This will make a tremendous difference to small businesses, which create the majority of new jobs in this nation and are so important to communities across America. When I talk to small businesses in Maine, their number one complaint to me is that they never know what the tax code is going to be, and thus they tend to freeze their investment decisions, and therefore their job creation, until that becomes clear. And when it does not become clear until the final month of the year, they essentially lose the opportunity to make investments that otherwise would have occurred at the beginning of the year.
I remember talking to the owner of a precision machining shop in southern Maine who told me that when 179 expensing is in effect he knows that he will buy more equipment and that he will be able to hire more skilled workers. But when there is uncertainty about whether it will be put into effect retroactively, he loses that opportunity because the machinery he makes, that he buys requires a long lead time. Similarly, I have heard from Maine’s wonderful craft beer industry, which makes the best beer in the United States, but also is a very labor and capital intensive industry. Well when these provisions like bonus depreciation and small business expensing are part of the tax code in a permanent way, they can plan their investments, and that helps not only these breweries, it also helps the entire supply chain, including the farmers in Aroostook County that are providing the malted barley and the hops that go into these beers. My point is, that the ramifications of having certainty and ending the unpredictability in our tax code for these three vital small business provisions will help to create many more new jobs for our economy.