Tax Cuts to Help America's Small Businesses Hire and Grow
New Tax Cuts to Businesses to Support Hiring and Investment: The President is proposing three tax cuts to provide immediate incentives to hire and invest:
Cutting the Payroll Tax in Half for the First $5 Million in Wages: This provision would cut the payroll tax in half to 3.1% for employers on the first $5 million in wages, providing broad tax relief to all businesses but targeting it to the 98 percent of firms with wages below this level.
Temporarily Eliminating Employer Payroll Taxes on Wages for New Workers or Raises for Existing Workers: The President is proposing a full holiday on the 6.2% payroll tax firms pay for any growth in their payroll up to $50 million above the prior year, whether driven by new hires, increased wages or both. This is the kind of job creation measure that CBO has called the most effective of all tax cuts in supporting employment.
Extending 100% Expensing into 2012: The President is proposing to extend 100 percent expensing, the largest temporary investment incentive in history, allowing all firms—large and small—to take an immediate deduction on investments in new plants and equipment.
Helping Entrepreneurs and Small Businesses Access Capital and Grow: The President's plan includes administrative, regulatory and legislative measures—including those developed and recommended by the President's Jobs Council—to help small firms start and expand. This includes changing the way the government does business with small firms. The Administration will soon announce a plan to accelerate government payments to small contractors to help put money in their hands faster. The President is also charging his CFO and CTO to, within 90 days, stand up a one-stop, online portal for small businesses to easily access government services. As part of the President's Startup America initiative, the Administration will work with the SEC to conduct a comprehensive review of securities regulations from the perspective of these small companies to reduce the regulatory burdens on small business capital formation in ways that are consistent with investor protection, including expanding "crowdfunding" opportunities and increasing mini-offerings. Finally, the President's plan calls for Congress to pass comprehensive patent reform, increase guarantees for bonds to help small businesses compete for infrastructure projects and to remove burdensome withholding requirements that keep capital out of the hands of job creators.