President Signs Small-Business Jobs Bill

President Barack Obama praised small businesses on Monday, saying they produce most of the jobs in this country, and “are the anchors of our main streets. They are part of the promise of America—the idea that if you’ve got a dream and you’re willing to work hard, you can succeed. That’s what leads a worker to leave a job to become her own boss. That’s what propels a basement inventor to sell a new product—or an amateur chef to open a restaurant. It’s this promise that has drawn millions to our shores and made our economy the envy of the world.”

The president signed the Small Business Job Act (SBA) at the White House alongside several small-business owners from around the country, Small Business Administrator Karen Mills, Treasury Secretary Tim Geithner, and members of Congress.

The law provides new benefits for small-business owners such as tax breaks and improvements to standing loan programs. These are meant as immediate incentives for small businesses to increase investments and expand.

The biggest news is capital gains tax relief.

The White House press release reported that small-business investments will be excluded from capital gains taxes under SBA until the end of the year if their investments are held for five years or more. The previous law held that 75 percent of capital gains on key small-business investments were excluded from taxes. The new law increases this to 100 percent.

Using the funds provided in the bill, SBA can start funding loans for some 1,300 small businesses, freeing more than $680 million for businesses that have been waiting for loans. Small banks get a $30 billion Small Business Lending Fund, intended to support much more than $30 billion worth of loans to small companies.

Self-employed people will be able to deduct 100 percent of health care costs for themselves and their families from their taxes. These tax cuts are expected to amount to $1.9 billion, affecting some 2 million self-employed people.

Penalties for tax filing mistakes are reduced.

The bill temporarily increases the amount of tax relief for start-up expenditures. Entrepreneurs can, under the new act, deduct $5,000 to $10,000 from their taxes for this year. The hope is to give people more incentive to implement new business ideas.

One small business owner present with the president was Larry Poltavtsev, CEO of Target Labs, Inc. The Vienna, Virginia, man was 1 of 14 other small-business owners at the signing. His business, Target Labs is a green, 100 percent wind powered company, which works toward offering technological solutions. The company has experienced recent steady growth, much like many other green businesses, and employs over 50 people.

Poltavtsev recently hired 12 employees as a result of a SBA backed loan, according to a White House press release.