FOR IMMEDIATE RELEASE: April 11, 2012
SCHUMER INTRODUCES LEGISLATION THAT COULD JUMPSTART SMALL BUSINESS EXPANSION ACROSS LIVINGSTON COUNTY; BILL WOULD PROVIDE TAX CUTS FOR COMPANIES THAT GROW THEIR BUSINESS AND HIRE NEW EMPLOYEES
Schumer Unveils Small Business Tax Proposal Aimed at Spurring Growth and Business Investment; New Legislation Provides Tax Cuts for New Hires, Pay Raises and Investments in New Equipment
Job-Creating Measure Aimed at Small Biz Would Lower Tax Bills When Companies Buy New Equipment & Hire Workers – Proposal Could Save Quinlan’s Pharmacy Tens of Thousands As Expansion Plans Move Forward
Schumer: Proposal Will Spur Economic Growth & Payroll Expansion Across Livingston County
Today, U.S. Senator Charles E. Schumer stood at the Livingston County Chamber of Commerce to unveil his proposal to make it easier for small businesses across Upstate New York to succeed, create jobs and act as engines for economic growth, through real tax relief that lowers the cost of doing business. Specifically, the Small Business Jobs and Tax Relief Act of 2012 would allow small business owners to write off the entire cost of new capital equipment purchases on their taxes, saving thousands of dollars in year-end tax costs. The bill also contains a 10% tax credit for each new worker hired in 2012, reducing the tax burden for businesses that create new jobs by up to $500,000. This proposal would make it easier for small businesses, like Quinlan’s Pharmacy and Medical Supply in Livingston County, to invest in themselves and their workers through two tax cuts that aim to encourage capital investment and workforce expansion. Quinlan’s Pharmacy is seeking to open an additional pharmacy that would require new equipment and the hiring of at least ten additional workers. Schumer’s proposal has the potential to save the company tens of thousands of dollars in lower taxes.
“Small businesses throughout the Rochester-Finger Lakes region, like Quinlan’s Pharmacy and Medical Supply, are in prime position for growth, and the federal government should be doing more, not less, to spur hiring,” said Schumer. “That is why this small business proposal, which aims to encourage business investment and growth through new tax cuts for businesses and encouraging business investment, is right on the money for Upstate New York’s small companies. This new proposal rewards actual job creation by true small businesses, which could be a game-changer for the Livingston County economy and local residents. As our economy continues to turn the corner, I will fight tooth and nail to bolster this trend and get this job-creating bill passed.”
Schumer stood with Quinlan Pharmacy and Medical Supply owner John Quinlan, Livingston County Chamber of Commerce President Cynthia Oswald, and local business leaders as he announced his proposal targeted at job-creation and small business growth across Livingston County and Upstate New York as a whole. Schumer highlighted that Quinlan’s Pharmacy and Medical Supply, with stores in Livingston County, would be perfectly suited to benefit from the Small Business Jobs and Tax Relief Act of 2012. Quinlan’s now has three locations in and around Livingston and plans to open another location this year in Montour Falls, Schuyler County. Pharmacy owners have told Schumer’s office that they will need to hire at least ten additional workers in order to run their new pharmacy location, and that they would need to purchase new equipment, such as delivery vans, in order for this new store to be a business success. In addition to salaries for the new employees, Quinlan’s estimates that they will spend $35,000 on new delivery vans, and $20,000 on computer software to run the expanded business.
The Small Business Jobs and Tax Relief Act of 2012 encourages business investment and growth in a number of ways, including the ability for businesses to write off, or depreciate, the entire cost of major purchases made this year. For instance, Schumer noted that Quinlan’s Pharmacy could use this 100% bonus depreciation for the cost of delivery vans and other equipment. Under this proposal, Quinlan’s can purchase that van or other equipment this year and write off the cost immediately. This proposal will reduce small businesses average costs of capital across all investments by more than 75% according to the Department of Treasury. What’s more, every $1 of tax cuts devoted to accelerated depreciation generates about $9 of GDP growth.
This small business jobs proposal would also create a new incentive to help small businesses add jobs this year. Specifically, Schumer’s proposal would make a 10% tax credit available to employers for new payroll in 2012. This portion of the proposal is targeted at truly small businesses across the Rochester-Finger Lakes region, the state and the country, by capping this benefit of the credit at $500,000 per employer. Schumer stated that if a small business like Quinlan’s Pharmacy, were to hire their anticipated ten new workers at the Schuyler County location, they will get a 10% tax credit for the additional payroll they expend to pay those workers. Between the savings on the new van purchases and additional employee hires, Quinlan’s estimates that Schumer’s legislation could save $20,000 on their year-end tax return.
Leading economists like Mark Zandi as well as the non-partisan Congressional Budget Office have endorsed hiring incentives like this as an effective way to spur economic growth and payroll expansion. The Congressional Budget Office, in a November 2011 report, said this exact type of proposal “would have the largest effects on output and employment per dollar” compared to those that “affect businesses’ cash flow but would have little impact on their marginal incentives to hire.” Schumer was joined by local business leaders as well as Quinlan Pharmacy and Medical Supply owner John Quinlan and Livingston County Chamber of Commerce President Cynthia Oswald, as he unveiled this job-creating proposal.