February 26, 2007
| The Honorable Nancy Pelosi Speaker U.S. House H-232 Capitol Building Washington, D.C. 20515 |
| The Honorable John Boehner Republican Leader U.S. House H-204 Capitol Building Washington, D.C. 20515 |
Majority Leader
U.S. Senate
S-221 Capitol Building
Washington, D.C. 20510
The Honorable Mitch McConnell
Republican Leader
U.S. Senate
S-230 Capitol Building
Washington, D.C. 20510
Dear House and Senate Leadership and Chairmen and Ranking Members of the Revenue and Labor Committees:
On behalf of the National Federation of Independent Business (NFIB), the nation’s leading small-business advocacy group, I am writing to urge you to include significant small-business relief as part of any minimum-wage legislation that passes the Congress after the House-Senate conference negotiations.
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.
In August 1996, President Clinton started a precedent by signing into law a minimum-wage increase that was attached to a tax package. As consideration of a new $2.10 minimum wage increase took shape in the 110th Congress, we were pleased when the Senate followed this precedent by passing an $8.3 billion tax package on February 1. That package provides a minimum level of relief for certain industries who are impacted by the wage hike the most – including restaurants, groceries, and retail stores – many of which are run by small-business owners.
As both chambers begin to take the necessary steps to negotiate a final compromise, please know that our highest priority is the extended and expanded small-business expensing (Section 179) provision. 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. The Senate bill extends this provision through 2010. The House bill contains an expanded version of this provision, which increases the expensing limit to $125,000, increases the investment limit to $500,000, and maintains the inflation adjustment. While we support both provisions, we ask you to include the House version in the final bill because it provides greater tax relief to small businesses.
In addition to the Section 179 provision, we urge you to include the following provisions from the Senate package in any final compromise: 1) an extension of the 15-year depreciation period for qualified leasehold and restaurant improvements; 2) an expansion of the 15-year depreciation period for new restaurant buildings and for qualified retail property; and 3) codification of the $10 million limit for the cash method of accounting that also allows businesses with inventory to qualify. Each of these provisions would provide significant relief to the small-business community burdened by a mandatory wage hike, and we appreciate your consideration to include them in the final legislation.
NFIB realizes that Congress is determined to use revenue offsets to pay for a small-business tax relief package, and that not everyone in the business community is happy with the tax offsets included in the Senate-passed bill. We urge Congress to stay focused on the goal of the tax package: helping those affected by the wage hike instead of satisfying those who are not by compromising the size of the tax package.
Thank you for your leadership on this issue, and we look forward to working with you as the 110th Congress moves forward.
Sincerely,
Dan Danner
Executive Vice President
Public Policy and Political
cc: The Honorable Richard J. Durbin, Senate Majority Whip
The Honorable Trent Lott, Senate Republican Whip
The Honorable Steny H. Hoyer, House Majority Leader
The Honorable Roy Blunt, House Republican Whip
The Honorable Max S. Baucus
The Honorable Charles E. Grassley
The Honorable Charles B. Rangel
The Honorable Jim McCrery
The Honorable Edward M. Kennedy
The Honorable Michael B. Enzi
The Honorable George Miller
The Honorable Howard P. (Buck) McKeon
