Speaking for Nevada - September 2003

KEEP OUR SMALL BUSINESSES ALIVE

by Jon Porter

Small businesses are the lifeblood of America’s economy. They are the companies that allow ideas to blossom, boosting business investment, employment and government revenue. I know firsthand about the value of small businesses because my dad owned a small business – Porter Selectric, an electronics shop in Humboldt, Iowa.

In the months I have served the Third District, Congress has passed key legislation to help businesses, both large and small, to prosper. The Jobs and Growth Tax Act of 2003 is one measure designed to stimulate the economy and business development. It encourages consumer spending to advance economic recovery, while promoting investment by individuals and businesses that will lead to economic growth and job creation.

There is more relief for small business within the Taxpayer Protection and IRS Accountability Act. A provision within this bill would simplify tax filing for nearly all "mom and pop" businesses by allowing married spouses in business to file a sole proprietorship return (Schedule C) instead of a partnership return. Spouses would be permitted to account separately for their respective self-employment income from the business. This will allow family businesses to take full advantage of Social Security and Medicare, while, at the same time, greatly simplifying tax filing.

Unfortunately, many small businesses have a tough time enduring economic downturns and are forced out of business.

Back here at home, Nevada may be known for casinos, but, according to statistics from the Small Business Administration (SBA), in 2001, small businesses employed 44 percent of workers in the state. The SBA also reports that, in 2000, the number of Nevada’s businesses forced to lay off employees increased by 6.3 percent. Nevada can’t afford to lose small businesses, just as employers can’t afford to let go of good employees.

I have introduced legislation allowing small businesses, whether service industries, retail or manufacturing, to defer part of their income each year to pay salaries, benefits and other expenses during economic hardship. The income put in the accounts is available to help keep businesses "in the black" and employees working.

The legislation, H.R. 2591, The Small Business Protection Act, permits small businesses to set aside up to 50 percent of their income for up to five years into a Small Business Protection Account, thus allowing the employers and employees to stay in business and pay their employee benefits when they face difficult economic times, and when their operating revenue may decline.

Numerous small business leaders and economic experts have testified about the importance of giving small businesses more opportunities to remain solvent and successful. Giving our small businesses more tools to stay in business is essential for preserving jobs and spurring our economic recovery.

Changes in the economic cycle should no longer affect the success of our small businesses. This bill is the result of consultations with small business owners across Nevada and in Washington, D.C. They all agree on the necessity of ensuring adequate revenues through difficult times. Michael Graham, deputy state director for the Nevada Small Business Development Center, attended the roundtable discussion and said, "This tax initiative is long overdue for small businesses. The bill offers a tax payment process for businesses that allows true planning for both good years and lean years."

I used to run a small business and I know firsthand what it’s like when you’re trying to balance the books and keep your employees on payroll when times are tough. I wrote this bill to give small business owners the ability to tap into this account when they face a downturn so they can keep their employees on the job and their businesses afloat.