Dear valued member,

If you would like more information on our organization, the benefits of membership, or are interested in joining to assist in our political and educational campaigns please use the links listed above. Thank you and we look forward to working with you toward our shared goals in the future.

Sincerely,

Robert J. DiCarlo
Senator Emeritus
NCE Executive Director 

Following closely on the heels of the recently passed $700 billion economic rescue plan, proposals are surfacing to help ease the financial pain felt by the small-business community. Amid the daily announcements on implementation of the government’s recently-passed economic recovery package, small business has continued plugging-away without significant attention to their challenges—until now. Senate Committee on Small Business and Entrepreneurship Chair John Kerry (D-Mass.) has called to temporarily eliminate fees on the U.S. Small Business Administration’s (SBA) flagship 7(a) loan guarantee program. Additionally, some are now calling for SBA to make direct loans to struggling small businesses.

In the past several years, the 7(a) program has encountered several challenges including increased fees due to Congress stripping all funding from the program in FY 2005. Nearly 300 banks have left the program altogether since 2006, and 2008 figures--recently released by SBA--don’t look much better. The number of 7(a) loans made in FY 2008 dropped 30 percent from 2007, and the total dollar volume in loans decreased by 11 percent.

Sen. Kerry and House Small Business Committee Chairwoman Nydia Velazquez (D-N.Y.) both have been outspoken on the need to make SBA loans affordable—particularly in a climate where small businesses will face even greater difficulty in securing traditional bank loans. Several lawmakers, including Sens. Charles Schumer (D-N.Y.), Evan Bayh (D-Ind.) and presidential hopeful Barack Obama (D-Ill.) have called for the federal government, through SBA, to temporarily make loans directly to small businesses impacted by the credit crunch. The administration is also said to be considering a proposal to provide direct loans to small businesses.

Rep. Charles Gonzalez (D-Texas) has introduced legislation designed to reduce the complexity of the tax code and provide taxpayers with the ability to take a standard deduction for home office expenses. House Small Business Committee member Charles Gonzalez (D-Texas) introduced the Home Office Tax Deduction Simplification and Improvement Act (H.R. 7074). The bill would bring clarity to the process of claiming the tax deduction for a home office and direct the Treasury Secretary to establish an optional standard deduction.

Currently, the tax code allows a deduction for home office expenses for self-employed taxpayers and employees who must use their home for business purposes at their employer’s request. However, according to the Internal Revenue Services’ Office of Taxpayer Advocate, only 2.7 million of the nearly 20 million Schedule C filers in tax year 2003 took a home office deduction, despite the fact that nearly 8 million taxpayers use one or more rooms in their home for business purposes.

Rep. Gonzalez introduced the legislation in the wake of a July 30 hearing he chaired on the House Small Business Subcommittee on Regulations, Healthcare and Trade. Witnesses described how the complexity of the tax code has led to the underutilization of deductions available to small-business owners. Testimony implied that the home office tax deduction is too complex and cumbersome, deterring home business owners from claiming the deduction.

Senate Proposal to Require Benefit Cost Disclosure

Members of the Senate recently released a draft proposal that would require employers to tell employees how much they pay for their health coverage.

The disclosure would be included on the annual W-2 forms, Wage and Tax Statement, and would have to include the amount spent on health insurance premiums for employees and their families, as well as the amount spent on dental and vision services. The information is meant to provide for greater transparency which the sponsors say would help control spiraling health care costs.

“The point of the proposal is to inform the people on their health care cost. Once informed, they might seek changes including improved efficiency, reduced waste and fewer unnecessary procedures, balanced with the natural need to have good coverage,” Grassley said in a recent press release.

The development of the proposal gained momentum after Peter Orszag, director of the Congressional Budget Office, said during his June testimony before the Senate Finance Committee, “if transparency increases and workers see how much their income is being reduced for employer’s contributions and what those contributions are paying for, there might be a broader change in cost-consciousness that shifts demand.”

Baucus said, “Finding ways to lower health care costs, along with measures to increase access and cover more Americans, will be an important part of the health care agenda I intend to pursue in the Finance Committee next year.”