To help spur American innovation, U.S. Reps. Vern Buchanan (R-FL) and Mike Kelly (R-PA) on March 3 led their Republican colleagues in introducing legislation to remove some of the initial barriers to creating a business through the expansion of federal tax incentives.
“Helping entrepreneurs take their unique ideas from concept to reality will jumpstart our economy and give [small businesses] a deserved shot at the American Dream,” said Rep. Buchanan. “As Congress prepares to address historic tax legislation, we need to focus on making it easier for small businesses to do what they do best — create jobs, advance innovation and invest back into our communities.”
The congressman sponsored the American Innovation Act, H.R. 1778, alongside five original cosponsors, including Rep. Kelly and U.S. Reps. Ron Estes (R-KS), Carol Miller (R-WV), and Adrian Smith (R-NE).
“The American Innovation Act allows for investments in research and development to help small businesses grow and allow entrepreneurs to take that next step in their American Dream,” Rep. Kelly said. “This pro-growth tax policy will kickstart our small businesses and make it easier for these businesses to create jobs, support families, and grow our local economies.”
If enacted, H.R. 1778 would quadruple the amount of start-up costs small business owners can deduct from their federal income taxes, raising it from $5,000 to $20,000.
Additionally, the bill would increase the threshold for deductions from $50,000 to $120,000 for start-up expenditures like advertising, employees’ salaries and benefits, rent, and utilities for new office space, according to a bill summary provided by the lawmakers.
The measure is under consideration by the U.S. House Ways and Means Committee.