Senator Kerry on Small Businesses

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A New ‘Era of Opportunity’ for Small Business

Small businesses are the engine of the American economy but they have been suffering under George W. Bush. Over the past two years, the number of small business closures has been greater than the number of small business openings. As the former Chairman and current Ranking Member of the Senate Small Business and Entrepreneurship Committee, John Kerry has been a national leader in promoting small businesses growth. Kerry owned his own small business, a cookie and muffin shop – Kilvert and Forbes – that he opened in 1976 with a friend in Boston’s Quincy Market giving him first hand experience of the obstacles faced by small business owners. As President, John Kerry will bring the lessons of owning and working in a small business and his leadership fighting to support small businesses in the Senate to the White House.

Priorities

'Small Business Opportunity Fund'
Investing in small business is good bang for the buck. For example, an additional $170 million investment could help make available $28 billion in long-term capital and equity for small businesses, creating 850,000 jobs annually. John Kerry will ensure that small businesses have all the federal support that they need to grow and thrive by;

HELPING MICRO-ENTERPRISES: About 60 percent of new businesses in New Hampshire are micro enterprises, defined as operations with five or fewer employees and revenues under $500,000. John Kerry would expand loans and equity for these smallest businesses.
ACCESSING CAPITAL: There has been a dramatic decline in venture capital funding – from $26 billion to $5 billion today – leaving many businesses without a source of equity financing. John Kerry will bridge the gap between entrepreneurs’ need for capital and traditional financing sources by increasing the federal government’s venture capital investments.
INCREASING LOANS: Financing that is affordable and easy to obtain is often difficult for small businesses to find. Bush has consistently shortchanged funding for loan programs. One of his proposals would have translated into the loss of almost 200,000 American small business jobs. John Kerry will expand loan programs to help more small businesses get off the ground.

A Fair Share in Federal Contracting for Small Business
The federal government is the largest buyer of goods and services in the world. Too often small businesses are denied access to the federal marketplace.

Restrict Contract Bundling: The practice of contract “bundling,” which turns small contracts into big ones that small businesses have a harder time competing for has undermined contracts for small businesses. President Bush pledged to end contract consolidation, but has not. In October, the Office of Management and Budget issued a report that showed that the number and size of bundled contracts has reached a 10-year high. John Kerry would provide small businesses with more opportunities for government contracting and work with federal agencies – including the Department of Defense, the Department of Homeland Security, and the Department of Health and Human Services – to reduce contract bundling.
Increase Number of Federal Contracts. Total federal contracts have increased 7 percent under President Bush, but the small business share of these contracts has decreased by 14 percent. John Kerry will increase the number of federal contracts that go to small business by increasing the government-wide goal for small business’s share of federal contracts to 30 percent.

Use the Tax Code to Help Small Businesses
A NEW TECHNOLOGY TAX BREAK: A recent survey found that only about 27 percent of small businesses with Internet sites sell their products over the Internet. However, e-commerce is becoming increasingly important and will account for at least $200 billion of retail sales by 2007. Moreover, small businesses also have difficulty purchasing new technology equipment or services. John Kerry believes that small businesses should get the tools they need to stay competitive in the 21st century economy. That is why he will assure that Small Businesses Development Centers around the country help focus small businesses on the technology that best meets their needs. He is also proposing to allow small businesses to write off investments in technology right away – rather than having to expense them over a period of time.

TAX SIMPLIFICATION FOR SMALL BUSINESS: America’s small businesses are drowning in tax paperwork. The nation’s employers are responsible for filing federal and state employment taxes and wage reports, as well as unemployment insurance reports. Just to keep up with these requirements, employers must maintain separate wage records for federal and state income tax withholding, FICA, FUTA, and SUI. In many cases, employers must report this information to government agencies at different times and in different forms. The burden is compounded when employers do business in more than one state, many of which have different legal or procedural requirements. John Kerry will reduce this burden by simplifying tax filing for small businesses including allowing the IRS and state agencies to combine, on one form, both State and Federal employment tax returns.

TAX CREDITS TO REDUCE ENERGY COSTS: America’s small businesses account for more than half of all energy consumption in North America. The growth and development of small businesses depends on an affordable and reliable energy supply. Increasing energy prices have hurt small businesses already struggling in this economy. To help small business owners reduce their utility bills, John Kerry will provide a credit to purchase equipment that meets energy-efficiency standards for heating and cooling in new buildings and to retrofit existing ones. He also will provide a 20 percent tax credit for the purchase of energy efficient building equipment, including electric heat pumps, hot water heaters, and natural gas heat pumps.

TAX CREDIT FOR CALLED-UP RESERVISTS: With so many reservists serving in Iraq, John Kerry believes that we need to provide support to small businesses whose reservists are called up for active duty. He will provide firms with 50 or fewer employees with called up reservists with up to $12,000 in tax credits. Half of the money could be used to cover the reservist's salary, and the other half could be used to help hire and train a temporary replacement. Kerry would provide small manufacturing companies with fewer than 100 employees with up to $20,000 in tax breaks to split between support for the reservist's salary and finding a temporary replacement.

Strengthen America's Base of Small Manufacturers
During the last three years 2.7 million (or one in every seven) manufacturing jobs have been lost nationwide. Both large and small companies have been hurt. To help strengthen America’s small manufacturers John Kerry will: increase loan and investment limits; develop a three-tier manufacturing skills training program for current workers, college, and high school students; increase funding for the Manufacturing Extension Partnership Program; and create an Office of Manufacturing at the Small Business Administration.

A Large Voice for Small Business
Over the past two years, the number of small business closures has been greater than the number started, which is not surprising considering Bush’s business agenda has largely benefited big corporations and cut programs that support small business. In a Kerry Administration, small business will have the support that it needs and deserves to grow and be strong. Kerry will give small business a cabinet level position; give small business a voice at the World Trade Organization to ensure that small businesses are considered in trade issues; and federal regulations are fair for small business.

Reducing Barriers to Supporting Employees
HEALTH CARE AT ONE-THIRD THE COST FOR SMALL BUSINESSES: Health care costs are rising about 15% this year for those small businesses and often as high as 25%. Just 62% of businesses employing 10 to 49 people offered a health plan in 2002 whereas about 99% of large firms did. Small businesses typically spend more on administrative costs and premiums often rise when one employee has high health care costs. John Kerry is proposing refundable tax credits for up to 50% of the cost of coverage to small businesses and their employees. Also giving small businesses access to the Congressional Health Plan will save small businesses approximately 15% in health care costs on top of the tax credit – so health care will be two-thirds cheaper for small business employees than it is today.

A NEW ‘SMALL BUSINESS RETIREMENT INITIATIVE’ TO HELP SMALL BUSINESSES OFFER SAVINGS PLANS: The biggest impediment for a small business to start a pension plan is the start up costs. In fact, setting up a small business pension plan can cost as much as $20,000 or more because of rules and regulations. Also, as pensions become complex it costs businesses resources to help manage them. John Kerry supports tax credits to help offset the start up costs of small businesses. He also supports a pension pooling fund to help pool the administrative costs of setting up pensions and savings plans for small businesses.

Health Care at One-Third the Cost for Small Business
Fewer Small Businesses Can Afford Health Care: Health care costs are rising about 15 percent this year for those small businesses and often as high as 25 percent. Just 62 percent of businesses employing 10 to 49 people offered a health plan in 2002 whereas about 99 percent of large firms did.

A MORE AFFORDABLE HEALTH PLAN. Small businesses typically spend more on administrative costs and they often see premiums rise when one employee has high health care costs. John Kerry will allow small businesses to join the new Congressional Health Plan, small businesses will be able to provide obtain a better deal for health care.

TAX CREDITS TO MAKE HEALTH CARE TWO-THIRDS CHEAPER. John Kerry is proposing refundable tax credits for up to 50 percent of the cost of coverage to small businesses and their employees. Also giving small businesses access to the Congressional Health Plan will save small businesses approximately 15 percent in health care costs on top of the tax credit – so health care will be two-thirds cheaper for small business employees than it is today.

http://www.johnkerry.com/issues/smallbiz/health_plan.html">Read John Kerrys Health Plan for Small Businesses

Champion of Small Business Entrepreneur
As the former Chairman and current Ranking Member of the Senate Small Business and Entrepreneurship Committee, John Kerry has been a national leader in promoting small businesses growth. Kerry owned his own small business, a cookie and muffin shop – Kilvert and Forbes – that he opened in 1976 with a friend in Boston’s Quincy Market giving him first hand experience of the obstacles faced by small business owners. As President, John Kerry will bring the lessons of owning and working in a small business and his leadership fighting to support small businesses in the Senate to the White House.

On the Record for Small Businesses
Kerry White House Will Be Small Business Friendly - John Kerry “favors expansion of small-business loans and federal support for R&D, especially research for energy independence.”

Kerry Focusing on Tax Breaks & Health Care for Small Businesses – “As the ranking member of the Senate Committee on Small Business and Entrepreneurship, Massachusetts Senator John Kerry might be expected to propose a plan that emphasizes the role of small business. In March he introduced a small business stimulus act that, if passed, would speed up depreciation schedules on high-tech equipment and provide tax breaks to sole proprietorships. Even his health-care plan has a sop to small businesses, in the form of tax credits to make coverage more affordable.”

John Kerry is Making “Small Business Tax Cuts a Key Part of His Platform” – “John Kerry, the first Democrat to toss his hat into the 2004 presidential ring, has made small-business tax cuts a key part of his platform.”

“Kerry Seeks to Increase Small Business Contracting” - John Kerry, “chairman of the Senate Small Business and Entrepreneurship Committee, introduced legislation that would increase the federal government's procurement goal for small businesses from 23 percent of all prime contracts to 30 percent by fiscal 2006. Kerry's bill, called the Small and Disadvantaged Business Ombudsman Act, also calls for the Small Business Administration to appoint an ombudsman to investigate the complaints of small business owners who feel they are being treated unfairly by government procurement officers or prime contractors. Small business owners who fear retaliation would be guaranteed confidentiality.”

John Kerry is “Prepared to Tackle” a Number of Small Business Issues – John Kerry “is prepared to tackle a number of issues, among them energy and environmental regulations impacting entrepreneurial firms. ‘Right out of the gate, I’ll hold a hearing on the relationship of small businesses to environmental regulation to diffuse the mystery about it and to try to figure out where big-company rules—when applied to small entities—don’t fit…Kerry says his chairmanship will be marked by bipartisan consensus…"The truth is, when I talk to small-business owners, I hear as much about energy, health care, taxes, the environment and regulations as I do from the owners of large businesses or their employees," he says. "The only difference is that these issues hit small businesses even harder. That’s why we need to carefully, thoughtfully and responsibly find answers that make sense for small firms.”

Kerry Brings New Focus for “Women Owned, Minority Owned” & “New Markets” - "In the last few years, the Small Business committee has focused very much on agency oversight and regulatory reform," says Doris Freedman, policy director for the National Commission on Entrepreneurship. "Under Kerry, they'll look more at what the SBA can do to marry the interests of high-tech companies and small businesses." SBA programs that target aid to women- and minority-owned businesses, as well as those in inner-city and rural areas, will probably get more support from Kerry than they would have received from Bond. The New Markets Initiative, in particular, is expected to gain another lease on life now that Kerry is chair. Signed into law by President Clinton in his last days in office, the initiative was supposed to channel money to inner-city businesses through specially-accredited investment companies. The initiative was eliminated in the Bush Administration's first budget proposal… Kerry is expected to fight for it.”

http://www.johnkerry.com/issues/smallbiz/

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