WASHINGTON, D.C. President-elect Barack Obama has proposed a four-part stimulus plan to revitalize the U.S. economy. The four key sections of the plan include immediate action to create good jobs in America; immediate relief for struggling families; direct, immediate assistance for homeowners; and a rapid, aggressive response to the nation’s financial crisis, using all the tools available. According to the Obama-Biden transition team, this plan aims to give small businesses access to necessary credit in order to meet payroll and create jobs.
The stimulus plan calls for the following initiatives that directly impact small businesses:
A New American Jobs Tax Credit: This will provide a new temporary tax credit to companies that add jobs here in the United States. During 2009 and 2010, existing businesses will receive a $3,000 refundable tax credit for each additional full-time employee hired.
Raise the small business investment expensing limit to $250,000 through the end of 2009: This provision will give small businesses an additional incentive to make investments and create jobs again by providing temporary business tax incentives through 2009. This provision will encourage all firms to pursue investment in the coming months, but will particularly benefit small firms that generally have smaller amounts of annual property purchases and choose to expense the cost of their acquired property.
Zero capital gains rate for investment in small businesses: The proposed plan would eliminate all capital gains taxes on investments made in small and start-up businesses.
Partner with America’s automakers to save jobs and ensure that next-generation clean vehicles are built in the United States: The plan would keep all options on the table for automakers to help them weather the financial crisis, as well as push for development of new battery technologies and production of next-generation fuel-efficient cars here in America.
Make credit available to small businesses and state or local governments: The plan would push for immediate steps to support non-financial institutions including small businesses, and states and municipalities. The Federal Reserve and Treasury have acted to preserve the availability of liquidity for financial institutions and, more recently, have created a program to purchase commercial paper directly from the large corporate issuers. Small businesses and state and local governments, however, are having serious difficulty obtaining necessary financing from debt markets.
Address the credit crisis facing small businesses: To address the massive credit crunch that is threatening America’s small businesses, the plan proposes two immediate steps
1) a nationwide emergency lending facility for small businesses that could be run through the U.S. Small Business Administration’s (SBA) Disaster Loan Program, which helped thousands of businesses in the wake of 9/11; and
2) temporarily eliminating fees on the SBA’s 7(a) and 504 loan guarantee programs for small businesses to help increase private lending for small businesses.
The proposed plan will be addressed first in the U.S. House of Representatives. The House leadership has not yet released the legislation to be considered on the floor.
The Automotive Service Association has made the Obama-Biden Stimulus Plan available on its legislative website. To view the plan in its entirety, visit ASA’s legislative Web site at www.TakingTheHill.com.