Baucus, left, and Camp are sure to include incentives for startup businesses in their tax rewrites, but the two face a deep partisan split over whether a big bill should help pay for a debt deal or meet the GOP demand of being revenue neutral.
The technology boom of the 1990s that created a wave of new businesses and jobs was built on innovation that lawmakers would dearly love to revive in today’s sputtering economy.
Some on Capitol Hill are looking for that formula in the form of a modest package of tax incentives that would be aimed at a new generation of fledgling entrepreneurs. It’s a quiet effort right now while larger, more ambitious attempts at a broad tax overhaul take shape. But backers believe the roadblocks to a tax overhaul, including the partisan impasse on virtually every fiscal issue, may clear the way for modest but tightly targeted tax provisions aimed at startups.
House Ways and Means Chairman Dave Camp, R-Mich., and Senate Finance Chairman Max Baucus, D-Mont., are sure to include incentives for startup businesses in the tax rewrite they are pursuing on parallel tracks. But the two men face a deep partisan split over whether a big bill should help pay for a debt deal, as Democrats insist, or meet the GOP demand of being revenue neutral.
Sen. Chris Coons, D-Del., and Senate Republican Conference Vice Chairman Roy Blunt of Missouri say there likely will be a rapid push for a new round of incentives for startups if the tax rewrite falters. It would be a follow-up to the expanded write-off for startup expenses that was included in a 2010 small-business jobs law and the easing of financial regulations in the 2012 startup financing law.
A new batch of startup incentives could be offered as an add-on to a year-end bundle of tax cut extensions or to a bipartisan proposal for manufacturing innovation centers. They also could be attached to a Democratic proposal to raise the minimum wage, which is opposed by Republicans and some business trade groups.
“There is bipartisan consensus that early stage startups have the most promise for rapid and high-quality job creation,” Coons said.
“It’s something we should do. I hope it doesn’t end up with some goal we’re unlikely to achieve, like overall tax reform,” Blunt said.
Both parties long have viewed the nation’s 28 million small businesses as keys to growth. Congress created the Small Business Administration in 1953 and began allowing small businesses to write off or expense some equipment purchases in 1958.
Although traditional small-business tax breaks have broad support, some economic experts such as John Haltiwanger, a University of Maryland professor, argue that the most potential for job creation comes from new ventures that rely on affiliated companies, lenders and investors.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.