PRECAST ECONOMIC UPDATE
Oct. 4, 2010
Good news this week. Congress has left town, which means we’ll have at least six or seven weeks when they’ll be too busy campaigning to do any more damage. I’m a firm believer that Congress usually does things “to” us and not “for” us, but there was a notable exception before the gang of 535 cleared out of the District. They passed a $42 billion package of loan expansions and tax breaks for small businesses. President Obama signed the bill Sept. 27. While this has been heavily criticized by the Republicans as a pre-election giveaway, and just another government bailout, guess what? This one may do some good for precasters and other small- business folks. Most of the measures take effect immediately. Among other things, the bill:
- Establishes a $30 billion small-business lending fund that provides capital to small banks with incentives to increase small-business lending that could pay off in lending that totals several times that amount.
- Creates eight new small business tax cuts including zero taxes on small business investments, immediate expensing of capital investments up to $500,000, an extension of the 50% bonus depreciation, and a five-year carryback of federal business credits. (Note: Check with your tax professional on the details and how it could affect your business plans.)
I could challenge the Democrats’ estimate that these incentives could provide up to $300 billion in new small-business credit and create half a million new jobs. I could also complain that 500,000 new jobs don’t go very far when we’ve lost 7 million. But, it’s so refreshing they’ve at least done something that might actually provide some small measure of hope for small businesses that I won’t complain – at least until they come back to town after the election.
For more details, read this brief summary from NPCA’s CPA firm