Impact of Mid-Term Elections on Small Business Taxes
With the mid-term elections now finally behind us, many small business owners are wondering what impact this will have on their company’s bottom line. In short they are mainly concerned about the tax implications especially regarding topics such as Section 179 that has long been stalled by politicians who view it as a bargaining chip to push their personal agendas .
Section 179 of the tax code allows businesses to deduct the full purchase price of equipment in the year it was purchased rather than spread it out over several years.
It’s an actually fair part of the code that helps businesses save money at their time of purchase so they can in turn use their money for other aspects of their business such as hiring new people or expanding to a new location. The problem is that it went from deduction of $500,000 in 2013 to only $25,000 in 2014– a huge drop! Obviously that big of a change is going to have major impact.
Back in April, the Senate Finance Committee approved a two-year extension for the original $500,000 level and then in June, the U.S. House passed a bill that approved permanent restoration of the $500,000 deduction level.
However after that the people that were in charge of the Senate at the time wouldn’t allow it to even get a vote. During a time when business needs to surge to improve the economy, the level of thinking behind such a stall tactic seems counterproductive to say the least especially with a real unemployment rate of around 12 percent!
Now that those people are no longer running things, the big question is, will the new members of congress step up to the plate?
Mid-Term Elections and Small Business Taxes
I think it’s safe to expect that with the huge number of republicans that were recently elected, that they will be pushing to take care of this problem and pushing harder than has been seen in a very long time. They know that business owners are frustrated as are the people out there looking for work.
You see the thing is that small business and corporate tax reform have huge impacts on the unemployment rate and the overall success of our country in terms of our current attempts at economic recovery.
This isn’t about trickle down economics — this is about common sense. Something like Section 179 doesn’t just benefit big businesses it helps everyone from farmers & ranchers to local beauty shops and web design firms.
So if you are an inspiring fashion designer, artist or entrepreneur of any type, this is something that will also become very important for you as well. Lets just hope that with a shift in power will also come a shift in the push to improve our economy via allowing companies to thrive right here at home.
We can rest assured that the issues will be pushed but how far they can actually get will be what we all need to make note of. Who will step up, vote and approve these measures and who will be responsible for trying to block them from taking place. For now we will have to wait and see… again.
How much impact do you think the mid-term elections will have on small business and the economy?