Statements On Introduced Bills And Joint Resolutions

Floor Speech

By Mr. MERKLEY (for himself and Mr. ALEXANDER):

S. 1402. A bill to amend the Internal Revenue Code of 1986 to increase the amount allowed as a deduction for start-up expenditures; to the Committee on Finance.

Mr. MERKLEY. Mr. President, I rise today to discuss legislation that will make it significantly easier for small businesses to open their doors. Providing a helping hand to small businesses is important at any time, but never more so than now, when so many Americans are out of work.

Small businesses are the engines of our economy. By some estimates, they employ approximately half the private workforce, and, in rural America, comprise nine out of ten businesses. In my home State of Oregon, many of the rural counties have unemployment rates approaching--or even surpassing--20 percent. Clearly, small businesses are going to be instrumental in turning things around.

Furthermore, small businesses are innovators--they produce 13 times more patents per employee than large firms. Right now, the U.S. needs this kind of innovation more than ever.

Our economy cannot thrive if small businesses are not doing well.

Unfortunately, it can be very difficult for small businesses to succeed. Start-up expenses are often prohibitive and it can take a few years before business owners begin to see a profit. There are administrative systems to create, employees to hire, a client base to build and supplies to purchase. This adds up to a lot of expenses. A Gallup poll showed that the average small business incurs $10,000 in expenses during that first year. However, if a business can last 4 years, it is much more likely to survive in the long term. We need to do more to help these businesses get through this difficult period.

Today, I am joining with my colleague from Tennessee, Senator Alexander, to introduce legislation that will help small businesses through their first year. The Small Business Jump Start Act of 2009 lessens the tax burden on new small businesses by doubling the deduction they can take for start-up expenses to $10,000. The Act also widens the pool of businesses eligible to take the full amount of the deduction in their first year of business. The Small Business Jump Start Act gives these new businesses a boost that first year, and for some, will eliminate the tax complications of amortizing start-up expenses. The Small Business Jump Start Act of 2009 is supported by the U.S. Chamber of Commerce, the National Federation of Independent Businesses, the National Association of the Self-Employed, and the National Association of Small Businesses.

I will highlight one Oregon small business that the Jump Start Act could have helped. Jack and Giovanina Giaccarini moved to Grants Pass, Oregon after Hurricane Katrina came through their town in Mississippi. It was their dream to start a business installing systems to help quadriplegics and disabled veterans maneuver around their homes. The first year of their business was tough--finding start-up capital was difficult and purchasing just one system to use for demonstrations cost $10,000. They struggled. Now they are in their third year of business and finally making a profit. Having a Jump Start in that first year would have made a significant difference early on.

This bill will go a long way for new small businesses looking to open their doors and employ people in their communities. Colleagues, in order to help America's small businesses and the economies of rural America, I urge you to support the Small Business Jump Start Act of 2009. It is time to reach out a helping hand to entrepreneurs and assist them in starting that new business now, to jump start our economy and create new jobs across America.

Mr. President, I ask unanimous consent that the text of the bill and letters of support be printed in the Record.

There being no objection, the material was ordered to be printed in the Record

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