Masonry Magazine December 1996 Page. 13
Importance of Small Businesses Recognized by 104th Congress
by: U.S. Representative Dennis Hastert
I learned about the challenges small business owners face from my parents. They owned a restaurant, and I saw how difficult it was to comply with Washington regulations, meet a payroll, find and train good workers all while trying to make ends meet and generate a profit. Unfortunately, for too many years, politicians have not recognized the importance of small businesses, nor understood the unique challenges they face. Thus, small business owners had to play defense against those in Washington who wanted to meddle with their companies and impose new taxes, mandates and regulations.
All that changed with the 1994 election. For the first time in decades, there were more small business owners in Congress than there were lawyers. The new Republican Congress recognized that it's small businesses which are key to a strong economy, not more government programs, and successfully worked to reverse anti-small business laws. We passed legislation that will enable more people to start a business or expand their existing business, thereby creating new jobs and strengthening the American economy.
Among the major achievements of Congress for small business, self-employed business owners will soon be able to deduct 80 per cent of their health care costs, enabling more people to buy health insurance and generating hundreds of dollars in tax savings.
At the beginning of the 104th Congress, small employers couldn't deduct any of the costs- even though large corporations can deduct 100 percent of the cost. But that number will rise to 30 percent this year, and to 80 per- cent by 2006. Every time a small business owner fills out his/her taxes, he/she will see and feel this victory.
Congress also opened the way for small businesses to use Medical Savings Accounts to provide health insurance for them selves and their employees. Up to 750,000 small businesses will have the opportunity to offer this con- sumer-based alternative to con- ventional health care coverage.
In addition, Congress passed changes to the tax code to help small firms buy computers and equipment. Phased in over the next seven years, the amount of equipment a small business owner can expense in the first year will increase from $17,500 to $25,000.
We also simplified pension rules and reporting procedures so that small business owners will be able to provide pension plans for them- selves and their employees. Small businesses will also have more flexibility due to Subchapter "S" modification. Many small business owners will have more flexibility in raising equity capital because the number of individual share- holders allowed in Subchapter S corporations has been increased from 35 to 75.
The Republican Congress also passed small business regulatory reform and a taxpayer bill of rights. Finally, Main Street busi- ness owners will have a fighting chance against the often unreason- able challenges of the IRS.
And for the first time, Congress has agreed to live by all the same rules and laws that it has imposed on the rest of the country. No longer will politicians remain far removed from the impact of their mandates and laws now they will begin to understand how dif- ficult it is to comply with vague rules and mountains of paper- work. Hopefully, this change will lead to more common sense laws.
But Congress can't rest on these successes if we're to increase eco- nomic growth. For example, although Congress passed com- mon sense product liability reform to end frivolous lawsuits, President Clinton sided with the trial lawyers and vetoed reform. Whether or not Congress can build on these achievements will be determined by the November election. Unfortunately, there are still some who think the best answer to any problem is another government program. But if Congress remains in the hands of those who understand the valu- able contribution of small busi- nesses, then we will be able to con- tinue our efforts to expand eco- nomic opportunity.
Representative Dennis Hastert is a Republican representing Illinois 14th Congressional District. He is also Majority Whip in the House of Representatives and serves on the Commerce and Government Reform and Oversight Committees.