Plan Includes Host Of Tax Breaks, Repeal Of Oil Export Ban
President Obama on Friday signed a $1.1 trillion spending bill that Congress had passed only hours earlier that included $622 billion in tax break extensions and a provision ending the ban on crude oil exports. The omnibus spending bill passed in a 316-113 House vote, followed quickly by a 65-33 Senate vote approving the combined omnibus spending and tax measures from the House. The AP said that in passing the 2016 spending package by an “overwhelming” margin, Congress “marked the end of a chaotic year on a surprising note of bipartisan unity and productivity.” Obama “promptly signed” and “welcomed the sprawling legislation,” which the AP described as including “something for nearly everyone.” The measure combined both “a $1.14 trillion government-wide spending measure to fund every Cabinet agency through next September, and a $680 billion tax package extending dozens of breaks touching all sectors of the economy, making several of them permanent and tossing the entire cost onto the deficit.” Among those provisions is the Section 179 tax deduction, which the AP previously examined. The president’s signing of the spending measure means that the Section 179 deduction for small business equipment purchases annually increases from $25,000 to $500,000. Focusing on the $622 billion in tax breaks, USA Today said the package signed Friday “permanently extends the enhanced child tax credit and earned income tax credit,” while maintaining through 2019 “a popular corporate tax break that allows companies to more quickly depreciate the value of new equipment.” The story asserted that although Republicans were “less enthusiastic about the 2,000 page government funding measure,” the bill provides their party with “a major win” by eliminating the prohibition on crude oil exports that was enacted in 1975. Bloomberg Politics reported that the spending measure “averts a US government shutdown and ends a 40-year ban on crude oil exports” as part of a plan that “ensures fiscal peace in Congress” until September.
What This Means For Small Businesses
Small businesses will benefit in several ways from the spending plan. For one, uncertainty about how the federal government will pay its bills has been temporarily alleviated, which may boost the economy. More tangibly, small businesses scored a much-needed win with the permanent extension of the Section 179 tax deduction, which will enable a higher level of business expenses to be deducted than was available in 2015. As the Wall Street Journal reported, permanent inclusion of the deduction alleviates uncertainty in business planning. NFIB President and CEO Dan Danner said, “This is a great day for small businesses.”
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.