Monday, September 27, 2010
WASHINGON - Senator Chuck Grassley has been named a "Guardian of Small Business" by the National Federation of Independent Business, or NFIB, for his outstanding voting record on behalf of America's small business owners in the 111th Congress.
"Small business owners pay close attention to how their lawmakers vote on the issues affecting their businesses. The Guardian award is a symbol of sincere appreciation from the small business community for votes that supported their ability to own, operate and grow their businesses," said NFIB President and CEO Dan Danner.
"I really appreciate receiving this award from small business owners," Grassley said. "Small businesses create 70 percent of new jobs, and we ought to do everything possible to put them in a stronger position to grow and hire workers. America's economic recovery and new opportunities depend on the ability of small businesses to succeed."
As Ranking Member or Chairman of the Committee on Finance since 2000, Grassley has been in a position and used it to promote and advance tax and health care policies that would help small businesses establish themselves and grow.
For example, last year, Grassley protested the placement of liens by the Internal Revenue Service, or IRS, on small businesses that unknowingly invested in prohibited tax shelters. Some of these businesses were assessed tax penalties as high as $300,000 per year but received a tax benefit for as little as $15,000 from the transaction. Grassley fought hard to persuade the IRS to provide temporary relief to small businesses facing these penalties until Congress could enact bipartisan legislation to fix the penalty structure. Grassley announced he would hold up all Treasury nominees until the IRS agreed to continue to suspend its enforcement actions, and the IRS agreed to suspend collection enforcement action. Grassley said it was a matter of fairness, as the Treasury Department was giving favorable tax treatment to government bailout participants, including big banks like Citigroup, while showing no leniency and placing liens on small businesses contrary to congressional intent. This week, legislation making a permanent fix for small business was passed by Congress and is on its way to the President for signature.
Similarly, Grassley strongly protested the way small businesses were neglected in the $814 billion stimulus bill enacted in February 2009. Less than one-half of one percent of the tax relief in that bill was directed to small business. In June 2009, Grassley introduced a comprehensive small business tax relief bill, the Small Business Tax Relief Act of 2009, or S.1381. Grassley said his goal was to "leave more money in the hands of small businesses so that they can hire more workers, continue to pay the salaries of their current employees, and make additional investments in their business." The NFIB strongly supported the Grassley bill and said, "To get the small business economy moving again, small businesses need the tools and incentives to expand and grow their business. S. 1381 provides the kinds of tools and incentives that small businesses need."
Most of the tax provisions in the small business bill passed by the Senate this month, which the President is scheduled to sign into law today, come from that comprehensive tax relief bill for small businesses that Grassley introduced last year. Unfortunately, the bill that passed left out the largest and most important provision in Grassley's bill: a 20-percent deduction for small business income. "Small businesses need the tax certainty this provision offers, and I'll continue to work for policies that will leave more money in the hands of small businesses," Grassley said.
Grassley also continues to work to educate Congress and the public about the impact of various policy proposals on small businesses. For example, the President and Democratic leadership of Congress have proposed increasing the top two marginal tax rates from 33 and 35 percent to 36 and 39.6 percent, respectively; increasing the tax rates on capital gains and dividends to 20 percent; fully reinstating the personal exemption phase-out, known as PEP, for those making over $200,000; and fully reinstating the limitation on itemized deductions, which is known as Pease, for those making over $200,000.
Grassley said it's not the case that increases in the top two tax rates would hit only wealthy individuals and only a small percentage of small businesses. "According to the Joint Committee on Taxation, 50 percent of all flow-through business income would be subject to the tax rate hikes," Grassley said. "So this hits small businesses especially hard because most small businesses are flow-through entities as S corporations, partnerships, limited liability companies and sole proprietorships." Grassley makes his arguments based on nonpartisan data from both the Joint Committee on Taxation and the Congressional Budget Office.
Similarly, during the health care reform debate, Grassley highlighted the cost of various proposals on small businesses, both in terms of their ability to provide health care to their employees and the regulatory burden imposed on them by the new health care regime. Grassley followed up on his previous statement about the Form 1099 reporting requirement enacted in the health care bill by voting to repeal the provision two weeks ago. While the measure failed, there is bi-partisan support to repeal these reporting requirements so Grassley continues to work for repeal before the provision becomes effective.
