Bill increases startup tax deduction to $50,000 to give more small businesses the opportunity to grow and combat increasing cost of starting a company
WASHINGTON, D.C. – Today, U.S. Senator Tammy Baldwin (D-WI) joined Senators Jacky Rosen (D-NV) and Jeanne Shaheen (D-NH) in introducing the Tax Relief for New Businesses Act, legislation to provide a tax break to entrepreneurs looking to start a small business and reduce barriers for startups. The bill would increase the startup tax deduction from $5,000 to $50,000, and allow businesses to write off more expenses to compensate for the increasing cost of starting a business. Currently, small business owners can only deduct up to $5,000 in startup costs in the first year, yet a recent survey found that they spend an average of $40,000 to get their businesses off the ground.
“Small businesses and the Wisconsinites behind them are the backbones of our local communities and our economy. For too many entrepreneurs, starting a business is too expensive and out of reach, and it’s our job to break down the barriers in their way so more Americans can pursue their dreams,” said Senator Baldwin. “Our tax code should incentivize entrepreneurs and support small businesses – not rig the system for the biggest corporations, like Republicans are trying to do. Our legislation is a commonsense step that will unlock opportunities for Wisconsin’s next generation of small businesses and help ensure they can grow, innovate, and shape the future of the Badger state.”
“If the US Senate passes this legislation it would help provide capital to reinvest in small business staff and get them to a stable, profitable bottom line much quicker. This would encourage existing and expanding businesses to invest and grow by improving cash flow in the early years of starting and growing the businesses. As a small business owner I strongly endorse this effort,” said TJ Semanchin, owner of Wonderstate Coffee in Viroqua, WI.
“Repeated research has demonstrated that new businesses – ‘startups’ – are a critical driver of economic growth, job creation, and opportunity expansion,” said John Dearie, President of the Center for American Entrepreneurship. “But launching a new business costs money. And because startup costs are incurred long before the first dollar of revenue, those costs can be a major obstacle to new business formation. That’s why the Tax Relief for New Businesses Act is so important. The legislation is powerfully pro-entrepreneurship, pro-growth, and pro-job creation. CAE thanks Senators Jacky Rosen (D-NV), Tammy Baldwin (D-WI), and Jeanne Shaheen (D-NH) for their leadership and looks forward to working with them to ensure swift passage of the legislation.”
“Starting a business is a vote of confidence in the future,” said Richard Trent, Executive Director of Main Street Alliance. “Men and women all across the country start businesses that help our communities thrive. Small businesses are connected to their communities, sponsoring little league teams, providing employment and creating a robust culture and economy. But one of the most difficult parts of starting a business is having the capital to do so. A lack of generational wealth, unfair lending practices and discrimination make this difficult for too many. The Tax Relief for New Businesses Act is a huge step in the right direction to level the playing field and jump start Main Streets all across America.”
In addition to Senators Baldwin, Rosen, and Shaheen, the Tax Relief for New Businesses Act is also co-sponsored by Senators Chris Coons (D-DE), Elissa Slotkin (D-MI), Ron Wyden (D-OR), Richard Blumenthal (D-CT), Ruben Gallego (D-AZ), Amy Klobuchar (D-MN), and Martin Heinrich (D-NM).
