February 15, 2007
Dear Representative:
On behalf of the National Federation of Independent Business (NFIB), the nation's leading small-business advocacy group, we support the extended and expanded small-business expensing provision in H.R. 976, The Small Business Tax Relief Act of 2007. However, we are disappointed that additional small-business tax relief is not included to offset the burden of a mandatory minimum-wage increase.
Small-business owners remain opposed to increasing the federally-mandated minimum wage because it would leave them with fewer choices in how they compensate their employees and when they decide to hire new ones. Since many in Congress are determined to raise the minimum wage, NFIB believes this increase should be coupled with growth-oriented tax relief that allows small-business owners to offset some of the costs of mandated wages, invest in their business and stay competitive.
Section 179 has a proven stimulative effect on the economy as small-business owners use the provision to grow their businesses and create new jobs. Adjusted for inflation, current law limits expensing to $112,000 this year and imposes an investment limit of $450,000. NFIB is pleased that H.R. 976 increases the expensing limit to $125,000, increases the investment limit to $500,000, and maintains the inflation adjustment. These changes will reduce not only the cost of capital investments for small-business owners, but also will also help to eliminate depreciation record-keeping requirements.
NFIB is disappointed to see the other beneficial tax relief provisions in the bipartisan Senate minimum-wage bill (H.R. 2) excluded from H.R. 976. In H.R. 2, the Senate was careful to give significant tax relief to the small-business community that needs it most while offsetting those provisions without harming small businesses. NFIB supported the H.R. 2 proposals to codify the increased thresholds for small-business use of the cash accounting method and to extend the shortened depreciation periods for restaurant and leasehold improvements.
We urge the House to consider additional relief for small businesses which will be mandated to pay the increased minimum wage.
Sincerely,
Dan Danner
Executive Vice President
Federal Public Policy and Political
