WASHINGTON, Jan. 2, 2013 /PRNewswire-USNewswire/ -- The Senate and House yesterday passed legislation to try and stem the damage from the so-called fiscal cliff, however they missed a key opportunity to forward a meaningful solution to our unsustainable fiscal future. Although supportive of several tax provisions included, NSBA is calling for a long-term solution to address the massive national debt through broad tax and entitlement reform and pragmatic spending cuts.
"Economic uncertainty is the number one challenge facing America's small-business owners," stated NSBA President Todd McCracken. "While the tax provisions provide a level of stability, we are left with the likelihood of ongoing brinksmanship and have no meaningful framework for addressing our long-term fiscal challenges."
Despite the failure of Congress to work together on a more responsible, long-term solution, there were a handful of tax provisions included that will impact many small businesses, including:
- A permanent estate tax exemption of $5 million, indexed for inflation, with a maximum rate of 40 percent;
- A permanent fix to the alternative minimum tax increasing the exemption to $78,750 for couples filing jointly, indexed for inflation;
- A temporary extension through 2013 for the increased Section 179 expensing limit of $500,000, the R&E (or R&D credit), 50 percent bonus depreciation, various energy efficiency tax credits and more.
The bill also will permanently extend the Bush tax cuts for families earning less than $450,000, as well as the 15 percent capital gains tax for earners under that threshold. Income above that threshold will now be subject to a 39.6 percent tax rate, up from 35 percent, and earners above that threshold will now be subject to a 20 percent capital gains tax.
"While the permanent extension for the lower tax rates is a positive, tax increases—at any level—should only have been done within the context of broad tax reform, particularly given that 83 percent of small businesses are pass-through entities and pay business taxes at the personal income level," stated McCracken.
Please click here for a more information on the fiscal cliff agreement.
Celebrating its 75th anniversary, NSBA is a staunchly nonpartisan organization advocating on behalf of America's entrepreneurs. NSBA's 65,000 members represent every state and every industry in the U.S., and we are proud to be the nation's first small-business advocacy organization. Please visit www.nsba.biz.
SOURCE National Small Business Association