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President George W. Bush delivers remarks to the National Federation of Independent Business (NFIB) 2004 Small Business Summit in Washington, D.C., Thursday, June 17, 2004. White House photo by Paul Morse.
Fact Sheet: Supporting Americas Small Businesses
President Bush recognizes that supporting Americas small businesses is critical to ensuring continued job creation. Small businesses create two-thirds of new private sector jobs in America, employ more than half of all workers, and account for more than half of the output of our economy. Because small businesses are vital to our prosperity, the President has taken important steps to assist small businesses and the hard working people they employ by reducing taxes, encouraging investment, and removing obstacles to growth.
The Presidents Policies are Helping Americas Small Businesses
More Americans are working today because the President made tax relief for Americas small business a key component of his economic program.
In 2004, 25 million small business owners will receive tax relief totaling about $75 billion.
The Presidents Jobs and Growth package reduced marginal income tax rates across the board, including the creation of a new 10-percent tax bracket and the reduction of the top rate to 35 percent. These rate reductions benefit the more than 90 percent of small businesses that pay taxes at the individual income tax rates, not the corporate rates.
The Presidents Jobs and Growth package also raised the amount that small businesses can expense for new capital investments from $25,000 to $100,000, reducing their cost of purchasing new machinery, computers, trucks, and other investments, and giving the manufacturing sector a boost.
The President supported and signed into law the phase-out of the Federal death tax, ensuring that family business owners are able to leave their businesses to their families or key employees.
The President has made tax relief permanence a top priority. All the tax relief enacted over the past three years, including the tax relief benefiting Americas small businesses, is scheduled to expire over the next several years. Raising taxes on small businesses will hurt economic growth and job creation.
In 2005, the expanded 10-percent bracket will sunset, increasing the tax burden of millions of owners of flow-through businesses.
In 2006, allowable small business expensing will shrink from $100,000 to just $25,000, increasing the cost of capital investments for Americas small businesses thus subjecting them to a higher top tax rate than corporations could face.
In 2011, the rate relief and other tax relief enacted over the past three years will sunset, resulting in a tax increase for every small business that pays taxes as an S corporation, a partnership, or a sole proprietorship.
In 2011, the death tax returns, threatening the ability of family farms and businesses to survive from generation to generation and increasing the costs of estate planning for their owners.
In addition to reducing the tax burden and opening markets, the President is helping millions of entrepreneurs by keeping our economy the most dynamic, flexible, and innovative in the world. This agenda is especially important to Americas small businesses.
The President has worked to make health care more affordable. The President has called for Association Health Plans (AHPs) to give Americas working families greater access to affordable health insurance. By allowing small businesses to band together and negotiate on behalf of their employees and families, AHPs would help small businesses and employees obtain health insurance at an affordable price, much like large employers and unions. The President has also signed into law health savings accounts (HSAs), which combine low-cost, high-deductible health insurance with tax-free savings accounts to pay for health care expenses and save for future medical needs. The President has also proposed to make premiums for health insurance purchased in conjunction with an HSA tax deductible.
The President is pushing Congress to pass legislation reducing frivolous lawsuits. The President supports enactment of medical liability reform, class action lawsuit reforms, and asbestos litigation reforms to expedite speedy resolutions of plaintiffs claims and curb the costs frivolous lawsuits impose on American businesses.
The President has proposed, and called on Congress to adopt, a National Energy Policy (NEP) to ensure that America has a reliable and affordable source of energy and to reduce our dependence on foreign sources. The Administration has completed implementation of nearly 75% of the more than 100 recommendations contained in the Presidents comprehensive NEP.
The President is urging regulatory relief to ensure that Federal regulations do not unduly handicap Americas entrepreneurs by streamlining regulations and reducing paperwork. Since the President took office, the Administration has slowed the growth of burdensome new rules by 75 percent, while still moving forward with crucial safeguards for homeland security, human health, and environmental protection. American small businesses saved $6 billion last year and more than $30 billion since 2001, due to the Presidents regulatory reforms.
The President is expanding opportunities for American small businessesabroad and at home.
America is the worlds largest exporter, and Americas small businesses are a large part of that success.
U.S exports accounted for about 25 percent of our economic growth during the 1990s, supporting an estimated 12 million jobs, and small and medium sized companies make up 97 percent of all exporters.
The Bush Administration is opening markets for American goods and services by completing free trade agreements with 11 countries (Australia, Morocco, Chile, Singapore, five countries of Central America, the Dominican Republic, and Bahrain) and launching negotiations with 10 others (Thailand, Panama, five countries of the Southern African Customs Union, Colombia, Ecuador, and Peru).
Taken together, the free trade agreements that the Administration has completed and/or launched would constitute Americas third largest export market, totaling $66.5 billion in U.S. exports.
Small exporters benefit from these agreements. For example, more than 6,000 small and medium-sized businesses export to Chile, more than 4,000 export to Costa Rica, and approximately 3,000 export to Honduras.
The Bush Administration is working to ensure that small businesses can compete fairly for their share of Federal government contracts, expand in under-served areas, offer flexibility in the workplace, and have access to capital.
The President developed a strategy to reverse the trend toward the bundling of contracts, a practice that denied small businesses the opportunity to win billions of procurement dollars.
Small businesses won more than 23% of all contract dollars last year, reaching a historical high and exceeding the statutory goal for the first time by any Administration.
In fact, Federal contract dollars to small businesses owned by women, minorities, and veterans increased to historic levels, surpassing several statutory goals in 2003.
Contracts to small firms that are socially and economically disadvantaged increased last year by an astounding 80%, from 249,000 to 449,000.
The Business Matchmaking Initiative, launched last year, advances the President's goal of giving small businesses a fair chance to bid on Federal contracts by connecting businesses directly with Federal, state, and local government agencies and large companies across the country to discuss business contracts.
The President has announced a new initiative to expand business ownership and entrepreneurship among minorities. The Administration will undertake a unique association with the National Urban League (NUL) to create an entrepreneurship network. Supported by the Business Roundtable and the Ewing Marion Kauffman Foundation, the NUL network will include one-stop centers for business training, counseling, financing, and contracting.
Between 2001 and 2003, the Bush Administration has increased the number of loans to small businesses by more than 50%, a 50-year record. This record level has already been surpassed in 2004.
The President has urged Congress to amend the Fair Labor Standards Act to provide private-sector workers the same voluntary, flexible scheduling options that government employees already enjoy, including Comp-Time and Flex-Time. Now that more families have both parents in the workforce, American workers need more options and flexibility to arrange their work schedules.