President Bush recognizes that supporting America’s small businesses is critical to ensuring continued job creation. Small businesses create two-thirds of new private sector jobs in America, employ more than half of all workers, and account for more than half of the output of our economy. Because small businesses are vital to our prosperity and reflect the hard work of the American people, the President has taken important steps to assist small businesses and the people they employ by reducing taxes, encouraging investment, and removing obstacles to growth.
The President’s Policies are Helping America’s Small Businesses
millions of Americans are prospering because the President made tax relief for America’s small business a key component of his economic program.
In 2004, 25 million small business owners will receive tax relief totaling about $75 billion.
The President’s Jobs and Growth package reduced marginal income tax rates across the board, including the creation of a new 10-percent tax bracket and the reduction of the top rate to 35 percent. These rate reductions benefit the more than 90 percent of small businesses that pay taxes at the individual income tax rates, not the corporate rates.
The President’s Jobs and Growth package also raised the amount that small businesses can expense for new capital investments from $25,000 to $100,000, reducing their cost of purchasing new machinery, computers, trucks, and other qualified investments.
The President supported and signed into law the phase-out of the Federal death tax, ensuring that family business owners are able to leave their businesses to their families or key employees.
America is the world’s largest exporter, and America’s small businesses are a large part of that success.
ports accounted for about 25 percent of our economic growth during the 1990s, supporting an estimated 12 million jobs, and small and medium sized companies make up 97 percent of all exporters.
The Bush Administration is opening markets for American goods and services by completing free trade agreements with 11 countries (Australia, Morocco, Chile, Singapore, five countries of Central America, the Dominican Republic, and Bahrain) and launching negotiations with 10 others (Thailand, Panama, five countries of the Southern African Customs Union, Colombia, Ecuador, and Peru).
Taken together, the free trade agreements that the Administration has completed and/or launched would constitute America’s third largest export market, totaling $66.5 billion in U.S. exports.
Small exporters benefit from these agreements. For example, more than 6,000 small and medium-sized businesses export to Chile, more than 4,000 export to Costa Rica, and approximately 3,000 export to Honduras.
The Bush Administration is working to ensure that small businesses can compete fairly for their share of Federal government contracts, expand in under-served areas, offer flexibility in the workplace, and have access to capital.
The President developed a strategy to reverse the trend toward the bundling of contracts, a practice that denied small businesses the opportunity to win billions of procurement dollars.
Small businesses won more than 23% of all contract dollars last year, reaching a historical high and exceeding the statutory goal for the first time by any Administration.
In fact, Federal contract dollars to small businesses owned by women, minorities, and veterans increased to historic levels, surpassing several statutory goals in 2003.
Contracts to small firms that are socially and economically disadvantaged increased last year by an astounding 80%, from 249,000 to 449,000.
The President has announced a new initiative to expand business ownership and entrepreneurship among minorities. The Administration will undertake a unique association with the National Urban League (NUL) to create an entrepreneurship network.
The President has urged Congress to amend the Fair Labor Standards Act to provide private-sector workers the same voluntary, flexible scheduling options that government employees already enjoy, including Comp-Time and Flex-Time. Now that more families have both parents in the workforce, American workers need more options and flexibility to arrange their work schedules.
Between 2001 and 2003, the Bush Administration has more than doubled the number of loans to small businesses, a 50-year record. This record level has already been surpassed in 2004.
In addition to reducing the tax burden and opening markets, the President is helping millions of entrepreneurs by reducing the costs of doing business in America. This agenda is especially important to America’s small businesses.
The President has worked to make health care more affordable. The President has called for Association Health Plans (AHPs) to give America’s working families greater access to affordable health insurance.
The President is pushing Congress to pass legislation reducing frivolous lawsuits. The President supports enactment of medical liability reform, class action lawsuit reforms, and asbestos litigation reforms to expedite speedy resolutions of plaintiffs claims and curb the costs frivolous lawsuits impose on American businesses.
The President has proposed, and called on Congress to adopt, a National Energy Policy (NEP) to ensure that America has a reliable and affordable source of energy and to reduce our dependence on foreign sources. The Administration has completed implementation of nearly 75% of the more than 100 recommendations contained in the President’s comprehensive NEP.
The President is urging regulatory relief to ensure that Federal regulations do not unduly handicap America’s entrepreneurs by streamlining regulations and reducing paperwork.
The President has made tax relief permanence a top priority. All the tax relief enacted over the past three years, including the tax relief benefiting America’s small businesses, is scheduled to expire over the next several years. Raising taxes on small businesses will hurt economic growth and job creation.
In 2005, the expanded 10-percent bracket will sunset, increasing the tax burden of millions of owners of flow-through businesses.
In 2006, allowable small business expensing will shrink from $100,000 to just $25,000, increasing the cost of capital investments for America’s small businesses - thus subjecting them to a higher top tax rate than corporations could face.
In 2011, the rate relief and other tax relief enacted over the past three years will sunset, resulting in a tax increase for every small business that pays taxes as an S corporation, a partnership, or a sole proprietorship.
In 2011, the death tax returns, threatening the ability of family farms and businesses to survive from generation to generation and increasing the costs of estate planning for their owners.