SBA Press Office

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U.S. Small Business Administration

-- News Release --

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Release Date: June 4, 2008
Contact: Christine Mangi (202) 205-6948
Release Number: 08-58
Internet Address: www.sba.gov/news/

Deputy Administrator Marks Five-Year Tax Cut Anniversary
at Small Business Roundtables

WASHINGTON – SBA Deputy Administrator Jovita Carranza marked the five-
year anniversary of the 2003 Tax Relief by addressing the economic
importance to small business owners of permanent tax relief at roundtables in
Detroit, MI and Atlanta, GA this week. Small business owners will be faced with
sizable increases if the President’s 2001 and 2003 tax cuts expire. In addition,
Carranza discussed how small businesses will benefit from the economic
stimulus package recently passed by Congress.

“In order to support small business growth and foster innovation, America
needs a fiscally sound tax policy,” said Deputy Carranza. “The President’s tax
relief has clearly helped small businesses but those tax reforms are set to
expire at the end of 2010. Extending the tax relief will provide the boost small
businesses need to start and re-invest in their businesses.”

Small businesses depend on capital to grow, and higher taxes discourage
saving and investment, especially during challenging economic times. Since
most small business owners often pay business income taxes on their individual
income tax return, higher income tax rates on individual income will have a big
impact on entrepreneurs. Of those Americans who have benefited from the
reductions in the top tax bracket, 75 percent were small business owners.
According to the U.S. Department of Treasury, 27 million small business owners
will face a $4,066 tax increase on average if the tax cuts expire.

“After 52 consecutive months of job growth, we are now in a period of slow
growth, making permanent tax relief even more important to small businesses,”
said Carranza. “America’s entrepreneurs are the drivers of innovation, allow
our country to be globally competitive and strengthen our economy. It is vital
that we support policies that will help them succeed.”

The small business benefits of the 2008 economic stimulus package were also
a topic of discussion. The package includes tax incentives for businesses to
make investments in new equipment this year – a 50 percent bonus deduction
on new equipment that normally would be depreciated over a longer term, and
an increase in the limit on expenses that small businesses can deduct from
annual income. The boost from this stimulus will help buoy the economy in the
coming months and strengthen consumer confidence.

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SBA 08-58 SBA Urges Making Tax Cuts Permanent