Small businesses across the country have benefited tremendously from the improving economy in the last few years, and the same is true of efforts on Capitol Hill to help these companies going forward. Now, a new law is being considered in the U.S. Congress that could have a major impact on the ability of those companies to hire new workers going forward.
Specifically, Congress is set to vote on a bill that would extend tax write-offs for new equipment and capital upgrades of up to $500,000 permanently, according to a report from the National Federation of Independent Business. In the past, lawmakers have really only extended this rule each year, and often do so at the last minute, which may put owners in a difficult position when it comes to making sure they can make the kinds of purchases that will help them expand their businesses going forward. Without the extensions, that number falls to just $25,000. If passed, the difference to many firms brought on by that new certainty is obviously going to be massive.
“That would encourage more businesses to make bigger investments, which would generate a lot more economic activity,” said NFIB CEO and president Dan Danner. “Businesses that know they can recoup the cost of big-ticket investments, like new machinery or vehicles or farming equipment, are a lot likelier to make the commitment. It’s good for the purchaser, of course, but it’s also good for the firms that manufacture and market the products because they’ve got more buyers. It’s a way to spur the economy and get things moving for businesses on both sides of the transaction.”
How big is the benefit?
If passed, the added savings – and the assurance that they’re not going to go away – could leave many small businesses with greatly improved bottom lines, which in turn could lead to more hiring, the report said. In all, this bill’s passage could translate to as many as 200,000 new jobs with small businesses nationwide, as these companies would be able to generate some $18 billion more in goods and services.
Owners who want to make sure they’re as well-positioned for this change as possible may do well to consider how they can cut their companies’ costs going forward. That might include finding more affordable small business insurance – including policies for commercial insurance – to potentially free up thousands of dollars annually.