Rarely a day passes without news reports featuring pictures of long lines of unemployed people seeking jobs. More than 10.5 million Americans were without full-time work in March, according to the Bureau of Labor Statistics. Equally disturbing was the decline among owners who had plans to create jobs, falling to a seasonally adjusted net 5 percent from 12 percent a month earlier.
There’s no better time than April’s tax filing season for small-business owners to demand that Washington, D.C. policymakers get serious about meaningful tax reform before our economy gets worse. Perhaps there is no one simple solution, but it’s certain that few solutions to the current job-killing tax code will be found by continuing the us-versus-them political fray that exists today.
Rather than trying to repair the entire code in one fell swoop, why not focus on key areas that could have an immediate favorable impact on the nation’s most effective and efficient job-creating sector. Restoring meaningful expensing levels to the U.S. Tax Code’s Section 179 deduction could not only reinvigorate small-business growth but help reduce those long unemployment lines at the same time.
A victim of recent fiscal cliff negotiations, expensing limits for property such as machinery and equipment, storage facilities and off-the-shelf software, Section 179’s benefit to small business has been unfairly targeted. Although small firms could deduct up to $500,000 worth of qualified purchases for 2013, brace yourself for next year’s tax hit; the section’s original limits of $25,000 have been reinstalled and will be in effect for 2014 expenses. Also lost will be your ability to expense certain real property.
Restoring these limits to reasonable levels would allow small businesses to plan ahead—something they cannot do now in the current uncertain political environment–and it would also simplify accounting and free up cash that could be reinvested in small businesses eager to expand.
But rather than glaring at political opponents on “the other side of the aisle,” lawmakers should fix their gaze on those long lines of people who are desperate to work and imagine them enjoying regular paychecks as employees at small businesses whose jobs now go wanting.
Allowing small businesses to plan for the future, simplify their accounting tasks and recover available cash to create new jobs is a winning combination for all Americans. Contact your representatives and senators today and urge them to support job-creating Section 179 deductions.
Employment figures ref: http://www.bls.gov/news.release/pdf/empsit.pdf