FOR IMMEDIATE RELEASE: April 23, 2012
SCHUMER INTRODUCES LEGISLATION THAT COULD JUMPSTART SMALL BUSINESS EXPANSION ACROSS CATTARAUGUS COUNTY; BILL WOULD PROVIDE TAX CUTS FOR COMPANIES THAT GROW THEIR BUSINESS AND HIRE NEW EMPLOYEES
Today, at Napoleon Engineering Services in Olean, Senator Charles E. Schumer unveiled 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 Napoleon Engineering Services (NES) and Scott Rotary Seals in Cattaraugus County, to invest in themselves and their workers through two tax cuts that aim to encourage capital investment and workforce expansion. Napoleon Engineering Services is seeking to hire at least 4 to 7 new workers in the near future, as well as to purchase new equipment like a new grinder and other manufacturing tools. Under Schumer’s proposal, NES could save approximately $16,000 on additional employee hires, and could save tens of thousands of dollars more on their year-end tax return through write-offs on their new equipment purchases. Scott Rotary Seals, which is in the process of moving to Olean, would benefit from $13,000 in savings on new hires, and tens of thousands in write-offs on new equipment.
“Small businesses throughout Western New York, like Napoleon Engineering Services and Scott Rotary Seals, 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 Cattaraugus 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 was joined by Olean Mayor Linda Witte, NES Operations Manager Chris Truman, NES Business Development Manager Eric Schenfield, Manager of Scott Rotary Seals Crystal Wiech, and other local business leaders as he announced his proposal targeted at job-creation and small business growth across Cattaraugus County and Upstate New York as a whole. Schumer highlighted that Napoleon Engineering Services and Scott Rotary Seals would be perfectly suited to benefit from the Small Business Jobs and Tax Relief Act of 2012.
Napoleon Engineering Services, a new ball bearing plant in Olean, plans to hire at least 4 to 7 employees in the near future and will purchase new equipment for its growing business. NES recently purchased a new Cylindrical Grinder valued at $100,000 and plans to purchase a large taper roller bearing test rig valued at over $120,000 later this year. Their equipment purchases coupled with their increase in personnel mean that NES could save over $16,000 thanks to Schumer’s legislation. Similarly, Scott Rotary Seals plans to purchase a new CMM machine and a new larger capacity CNC Lathe with a combined cost of almost $250,000 as they continue to build and expand their new Olean facility. Scott Rotary Seals will also be adding between 4 and 6 new employees and could see a tax savings from Schumer’s proposal of over $13,000 on those new hires alone.
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 NES and Scott Rotary Seals could use this 100% bonus depreciation for the cost of their new Grinders, Lathe and other equipment. Under this proposal, the company can purchase that 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 Western New York, the state and the country, by capping this benefit of the credit at $500,000 per employer. Schumer stated that if small businesses like Napoleon Engineering Services and Scott Rotary Seals, were to hire their anticipated new workers in Olean, they will get a 10% tax credit for the additional payroll they expend to pay those workers.
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 Olean Mayor Linda Witte, NES Operations Manager Chris Truman, NES Business Development Manager Eric Schenfield, Manager of Scott Rotary Seals Crystal Wiech, as he unveiled this job-creating proposal.