WASHINGTON, D.C. - As the Senate prepares to vote on the American Jobs Act, U.S. Sen. Sherrod Brown (D-OH) discussed provisions that will help small businesses expand and hire workers. The American Jobs and Closing Tax Loopholes Act of 2010 (Extenders Bill) would provide critical tax cuts and support for American workers through the end of this year.
"We know that small business lending is critical to our economic recovery. Yet, the small business owners I meet all share the common concern that banks are not lending," Brown said. "We need to close loopholes that give tax breaks to corporations that ship jobs overseas. And we need to extend critical tax incentives that help small business expand and hire new workers. Our economy will not fully recover until every Ohioan looking for work can find a job. That's why the American Jobs Act is so important."
The American Jobs and Closing Tax Loopholes Act of 2010 would close foreign tax loopholes that give tax breaks to companies that eliminate American jobs and would help make loans more affordable for small businesses. For more information on Foreign Tax Provisions, click here.
The bill would also invest in long-term job creation by allowing small businesses to access capital and hire new workers. Below is a brief summary of some tax incentives and investments in the legislation. Click here for a full summary of tax incentives.
- Small Business Lending - This bill would extend Small Business Administration (SBA) loan programs to help restore the flow of credit so small business can expand operations and hire new workers. This extension would eliminate fees for certain SBA loans and increases government loan guarantees. Since their creation in the Recovery Act, these provisions have supported over $29 billion in small business lending and helped create or retain more than 650,000 jobs.
- The R&D Tax Credit- reinstates the research credit for qualified research expenditures in the United States - 20 percent credit over a statutory base amount - through the end of 2010. More than 75 percent of credit dollars are earned on wages paid to people working in high-skilled, high-paying R&D jobs in the U.S. This provision will foster increased research and development to help our nation create more high-wage jobs, and spur the next generation of processes and products.
- Infrastructure Investments - This bill would extend important bond programs, such as Build America and Recovery Zone Bonds that will be used to put Americans to work right away in good-paying jobs building and improving our schools, roads and bridges.
Small business lending is critical to our economic recovery - Small Business Administration (SBA) loans through the Recovery Act have supported more than $29 billion in small business lending, which has helped to create or retain 650,000 jobs. The Extenders Bill extends the fee elimination and increases the government guarantees on SBA 7(a) loans from 75 percent to 90 percent. The 7(a) loan program is the SBA's primary loan program and designed for start-up and existing small businesses to obtain financing when they might not be eligible for business loans through normal lending channels. The loans can be used for a variety of purposes, including working capital, machinery and equipment, furniture and fixtures, land and building (including purchase, renovation and new construction), leasehold improvements, and debt refinancing. Loan maturity is up to 10 years for working capital and generally up to 25 years for fixed assets.
Following today's call, Brown released data which compared the number of small businesses that took advantage of lending provisions included in the American Recovery and Reinvestment Act of 2009 (ARRA) with the number of companies that utilized these loans after the Recovery Act provisions expired. In October 2009, Sen. Brown introduced the Small Business Emergency Loan Relief Act, that would temporarily raises the maximum loan amounts for the three main Small Business Administration (SBA) loan products: the 7(a) loan, the 504 loans, and the America's Recovery Capital (ARC) Loan Program.
With more than 98,000 Ohioans unemployment insurance benefits set to expire by the end of June, passage of the American Jobs and Closing Tax Loopholes is even more critical. Brown is pushing for the extension of unemployment insurance included in the legislation, which will provide assistance to Ohioans seeking work. The Senator is also leading the charge to amend the legislation to include an extension of the COBRA temporary health coverage subsidy for workers laid off after May 31.