U.S. Sens. Pat Toomey of Pennsylvania and Bob Menendez of New Jersey have joined forces on a bipartisan bill to help small businesses get started.
Their bill, known as the Startup Jobs and Innovation Act, would simplify tax requirements for small-business owners and increase tax deductions for equipment.
The existing tax code is tough on small businesses, said Menendez, a Democrat.
“The code is confusing at best. Most of it has been written with big business in mind,” he said. “There’s nothing wrong with that, but major corporations can afford high-priced tax lawyers to minimize confusion but a new startup has all it can do to figure out the system.”
Republican Toomey, a former restaurant owner, said a small increase in tax deductions can make a big difference.
“Things like increasing the deduction of the startup expense. I know that helps,” he said. “I know when I was operating my restaurants, the ability to expense the cost of a new walk-in cooler — or a new refrigerator or dishwasher or whatever it might have been — that makes a difference in being able to purchase those items.”
The bill would double how much a small business can deduct for overhead costs as well as keeping a soon-to-expire tax write-off that covers new equipment for startups.