# GOP should let small business bill through **URL:** \ **Category:** Great Debates\ **Created:** [August 30, 2010, 9:31pm UTC](https://boards.straightdope.com/t/gop-should-let-small-business-bill-through/552049 "2010-08-30T21:31:09Z")\ **Posts on this page:** 15\ **Page:** 2
**Author:** ![magellan01](https://avatars.discourse-cdn.com/v4/letter/m/45deac/32.png) [@magellan01](https://boards.straightdope.com/u/magellan01)\ **Post date:** [September 1, 2010, 8:52pm UTC](https://boards.straightdope.com/t/gop-should-let-small-business-bill-through/552049/21 "2010-09-01T20:52:12Z")
> [@begbert2](#): > > nm - there’s no point. Uh-oh, we agree. :eek: ---
**Author:** ![Snowboarder\_Bo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowboarder_bo/32/229_2.png) [@Snowboarder\_Bo](https://boards.straightdope.com/u/Snowboarder_Bo)\ **Post date:** [September 1, 2010, 8:56pm UTC](https://boards.straightdope.com/t/gop-should-let-small-business-bill-through/552049/22 "2010-09-01T20:56:41Z")
> [@Mr\_Smashy](#): > > What is in the damn bill? your OP link was content-free, just Obama speechifyin’. > > The WashingtonMonthly blog piece by **Jas09** tried to save your bacon but it too doesn’t go into the details, it’s just a thinly-veiled attempt to hammer the GOP. > > You can bet that if the Maine Senators are against it, then it’s not exactly middle-of-the-road. The GOP whip doesn’t command that kind of kneejerk obedience. I dunno. That’s one of the reasons I started the thread. I thought it was weird that the story didn’t reference the bill #, and my googling basically just kept turning up the AP story. Maybe another thing we could discuss is, if this was important enough to merit mention in the press, why wasn’t the fucking bill # listed as well? Myself, I figured we have enough people here who seem strident enough in their belief that Obama is anti-business, I figured at least one of them would know about this bill if only to be able to crow loudly about how shitty it was, etc. I mean, how do they know he’s anti-business if they don’t know what he wants to do for businesses? ---
**Author:** ![Snowboarder\_Bo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowboarder_bo/32/229_2.png) [@Snowboarder\_Bo](https://boards.straightdope.com/u/Snowboarder_Bo)\ **Post date:** [September 1, 2010, 9:02pm UTC](https://boards.straightdope.com/t/gop-should-let-small-business-bill-through/552049/23 "2010-09-01T21:02:34Z")
**Jas09** 2nd link was straight to the senate website, where there is [a link to H.R. 5297 - Small Business Jobs and Credit Act of 2010](http://thomas.loc.gov/cgi-bin/bdquery/z?d111:HR5297:). ---
**Author:** ![Mr\_Smashy](https://avatars.discourse-cdn.com/v4/letter/m/2bfe46/32.png) [@Mr\_Smashy](https://boards.straightdope.com/u/Mr_Smashy)\ **Post date:** [September 1, 2010, 9:21pm UTC](https://boards.straightdope.com/t/gop-should-let-small-business-bill-through/552049/24 "2010-09-01T21:21:28Z")
> [@Snowboarder\_Bo](#): > > **Jas09** 2nd link was straight to the senate website, where there is [a link to H.R. 5297 - Small Business Jobs and Credit Act of 2010](http://thomas.loc.gov/cgi-bin/bdquery/z?d111:HR5297:). Gotcha. Lots of words there. I saw a lot of tax credits, grants, etc… with the only counterveiling revenue in Sec 533: > [@](#): > > Increases by 7.75% the estimated tax installment for the third quarter of 2015 for corporations with assets of not less than $1 billion. Not sure how this could be rev neutral (and to **Shodan’s** point, any spending when you are living on credit cards is by definition “not paid for” - that was the big lie behind the healthcare bill being ‘paid for’). ---
**Author:** ![spazattak](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@spazattak](https://boards.straightdope.com/u/spazattak)\ **Post date:** [September 1, 2010, 9:42pm UTC](https://boards.straightdope.com/t/gop-should-let-small-business-bill-through/552049/25 "2010-09-01T21:42:53Z")
> [@Mr\_Smashy](#): > > > [@Snowboarder\_Bo](#): > > > > **Jas09** 2nd link was straight to the senate website, where there is [a link to H.R. 5297 - Small Business Jobs and Credit Act of 2010](http://thomas.loc.gov/cgi-bin/bdquery/z?d111:HR5297:). > > Gotcha. Lots of words there. I saw a lot of tax credits, grants, etc… with the only counterveiling revenue in Sec 533: > > > [@](#): > > > > Increases by 7.75% the estimated tax installment for the third quarter of 2015 for corporations with assets of not less than $1 billion. > > Not sure how this could be rev neutral (and to **Shodan’s** point, any spending when you are living on credit cards is by definition “not paid for” - that was the big lie behind the healthcare bill being ‘paid for’). [CBO Analysis of HR5297](http://thomas.loc.gov/cgi-bin/cpquery/?&sid=cp111dHWBq&r_n=hr499.111&dbname=cp111&&sel=TOC_112523&) The plus/minus on the revenue is going to be complex because the bill is making loans available - it’s not generally giving money away for free. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [September 1, 2010, 9:50pm UTC](https://boards.straightdope.com/t/gop-should-let-small-business-bill-through/552049/26 "2010-09-01T21:50:31Z")
Here are the main features of the House version of the bill(s) (actually passed as two acts, it seems): [QUOTE=HR 5297] \* **Small Business Lending Fund** : Delivers loans to small business on Main Street to push the recovery forward and create jobs through a new $30 billion lending fund for small and medium sized community banks ($10 billion or under) that could leverage up to $300 billion in lending. \* Community banks provide the credit that small businesses need to grow and create jobs in communities across the country and now the financial crisis on Wall Street and the Bush recession have diminished these banks’ ability to lend. \* CBO estimates that this provision would actually save taxpayers $1 billion over 10 years, as banks are expected to pay back these funds over 10 years with interest. \* The bill includes tough performance-based incentives to make sure that these banks lend to small business. \* Banks with assets of less than $1 billion would be able to borrow an amount equal 5% of their assets, and banks worth up to $10 billion would be eligible for an investment of up to 3% of their assets. \* The banks would repay the government’s loan at a dividend rate starting at 5% with lower interest payments if they expand their small business lending. That rate would drop by 1% for every 2.5% increase in small business lending that the bank shows compared to 2009. A lender could cut its dividend rate to just 1% by increasing small business loan portfolio by 10%. \* But if the bank reduced its small business lending, its repayment dividend would shoot up as high as 7%. \* The program would only be available to banks with assets of less than $10 billion – ruling out the megabanks that have drawn fire for putting their own interests before their customers. \* **State Small Business Credit Initiative** : Provides $2 billion in funding for new or existing state lending programs. These programs already exist in around thirty states, and use small amounts of public dollars to generate substantial private bank financing. By supporting existing expertise in states around the country and using an easy to replicate model, this program will be able to quickly increase small business lending and create jobs. This would have a significant bang for the buck supporting over $20 billion in small business lending. \* **Small Business Early Stage Investment** : Helps promising small business start ups through a public/private partnership designed to channel investment capital to them. How small businesses are financed is evolving. While entrepreneurs have traditionally used assets like real estate to secure loans, we are now seeing more business owners seek financing based on non-tangible strengths – like their intellectual capital and employees. This proposal recognizes this shift and helps firms access capital to grow and create jobs. This provision has twice passed the House, in the Small Business Financing and Investment Act – H.R. 3854 – and, again, in the Small Business Early Stage Investment Act of 2009 – H.R. 3738, with strong bipartisan support. Estimated cost: $1 billion over 10 years. [/QUOTE] [QUOTE=HR 5486] \* **Spur Investment in Small Businesses** : Increases the capital gains tax cut for those who invest in small businesses this year, like President Obama’s budget. The bill would exclude 100% of capital gain income for stock in small businesses purchased from March 15, 2010 to January 1, 2011. Estimated cost: $2.0 billion over 10 years. \* **Small Business Penalty Relief** : Fixes a tax shelter disclosure penalty (Section 6707A) disproportionately impacting small businesses. Endorsed by the Small Business Council of America, the bill makes penalties for failing to disclose reportable transactions on their taxes proportionate to the underlying tax savings for small businesses.Some businesses were assessed penalties as high as $300,000 for receiving a tax benefit of as little as $15,000. Estimated cost: $176 million over 10 years. \* **Increase in deduction for business start-up expenditures** : Increases to $20,000 (from $5,000 in current law) the deduction forstart-up expenditures in connection with investigating the creation of a business (but not capital or equipment), and allows more businesses to qualify for the maximum deduction. By allowing entrepreneurs to recover more start-up expenses, small business owners can focus more on hiring new workers and growing their businesses. Estimated cost: $508 million over 10 years. [/QUOTE] Here is how it is paid for: > [@](#): > > ``` > * **Crude Tall Oil** : Closes a loophole that allows paper mills to claim biofuel tax credit for a byproduct known as "crude tall oil"-- a waste by-product of paper manufacturing. The bill would limit the tax credit to fuels that are not highly corrosive (i.e., fuels that could be used in a car engine or in a home heating application). Estimated to raise $1.849 billion over 10 years. > * **Curtailing a Gift Rule Loophole** : Includes the President’s 2011 Budget proposal to significantly limit a type of tax planning that allows rich families to pass on wealth while cutting their estate and gift taxes. It requires taxpayers setting up a trust (grantor retained annuity trusts (“GRATs”)) totransfer of assets to another individual to avoid gift taxes must include a minimum 10-year term for the annuity. GRATs are a trust with a specific life or term that allows a wealthy person to transfer more money to heirs than they otherwise could under the “$1 million in a lifetime” rule. With the strategy, an asset is placed into a trust by a grantor, who then takes back an annuity, which is made up of the asset value plus a variable interest rate. GRATs work best when the asset appreciates more than the interest rate. Death during the term of the annuity generally eliminates the tax benefit of using a GRAT, as it is taxed to the estate. By calling for a 10 year term, the bill requires that taxpayers take a greater risk that they might die during the GRAT term in order to take advantage of the gift tax benefits of this device. Estimated to raise $5.297 billion over 10 years. > > ``` ---
**Author:** ![tomndebb](https://avatars.discourse-cdn.com/v4/letter/t/b9e5f3/32.png) [@tomndebb](https://boards.straightdope.com/u/tomndebb)\ **Post date:** [September 1, 2010, 9:53pm UTC](https://boards.straightdope.com/t/gop-should-let-small-business-bill-through/552049/27 "2010-09-01T21:53:33Z")
> [@smiling\_bandit](#): > > Since you were too lazy . . . . > . . . want other people to spend their time and energy to educate your lazy arse. > > And it is much more fun to instruct you in all the ways you are deficient. . . . > > . . . > When come back, bring wit. These comments are out of line in Great Debates. Knock it off. [/Moderating] ---
**Author:** ![Jack\_Batty](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jack_batty/32/3201_2.png) [@Jack\_Batty](https://boards.straightdope.com/u/Jack_Batty)\ **Post date:** [September 1, 2010, 9:58pm UTC](https://boards.straightdope.com/t/gop-should-let-small-business-bill-through/552049/28 "2010-09-01T21:58:49Z")
I think the main point here is that Obama speechifyin’ on it is reason enough for the GOP to block it. You see, they don’t like it when Obama speechifies. ---
**Author:** ![smiling\_bandit](https://avatars.discourse-cdn.com/v4/letter/s/e9a140/32.png) [@smiling\_bandit](https://boards.straightdope.com/u/smiling_bandit)\ **Post date:** [September 1, 2010, 11:36pm UTC](https://boards.straightdope.com/t/gop-should-let-small-business-bill-through/552049/29 "2010-09-01T23:36:10Z")
> [@Jack\_Batty](#): > > I think the main point here is that Obama speechifyin’ on it is reason enough for the GOP to block it. > > You see, they don’t like it when Obama speechifies. Well, he’s increasingly bad at it. But even lacking that, the Bill s written is rather pointless and won’t do much, except possible provide Democrats with more opportunities for graft. ---
**Author:** ![Snowboarder\_Bo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowboarder_bo/32/229_2.png) [@Snowboarder\_Bo](https://boards.straightdope.com/u/Snowboarder_Bo)\ **Post date:** [September 1, 2010, 11:47pm UTC](https://boards.straightdope.com/t/gop-should-let-small-business-bill-through/552049/30 "2010-09-01T23:47:08Z")
> [@smiling\_bandit](#): > > > [@Jack\_Batty](#): > > > > I think the main point here is that Obama speechifyin’ on it is reason enough for the GOP to block it. > > > > You see, they don’t like it when Obama speechifies. > > Well, he’s increasingly bad at it. But even lacking that, the Bill s written is rather pointless and won’t do much, except possible provide Democrats with more opportunities for graft. What parts of the bill do you think will be ineffective at achieving the goals outlined for reasons for passage? Do you think these parts are poorly worded and so can’t be properly acted upon, or that the actions themselves will be unsuccessful? Or is there another direction that you think this bill should have taken? What should be written differently to better accomplish the goals of the bill? Or do you think the reason for the bill itself is also spurious and think that no bill addressing these concerns should have been written? ---
**Author:** ![Snowboarder\_Bo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowboarder_bo/32/229_2.png) [@Snowboarder\_Bo](https://boards.straightdope.com/u/Snowboarder_Bo)\ **Post date:** [September 1, 2010, 11:57pm UTC](https://boards.straightdope.com/t/gop-should-let-small-business-bill-through/552049/31 "2010-09-01T23:57:57Z")
I like this part: > [@](#): > > - The program would only be available to banks with assets of less than $10 billion – ruling out the megabanks that have drawn fire for putting their own interests before their customers. ---
**Author:** ![Jack\_Batty](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jack_batty/32/3201_2.png) [@Jack\_Batty](https://boards.straightdope.com/u/Jack_Batty)\ **Post date:** [September 2, 2010, 12:11am UTC](https://boards.straightdope.com/t/gop-should-let-small-business-bill-through/552049/32 "2010-09-02T00:11:02Z")
> [@smiling\_bandit](#): > > > [@Jack\_Batty](#): > > > > I think the main point here is that Obama speechifyin’ on it is reason enough for the GOP to block it. > > > > You see, they don’t like it when Obama speechifies. > > Well, he’s increasingly bad at it.. He’s no Sarah Palin, I’ll give you that. ---
**Author:** ![smiling\_bandit](https://avatars.discourse-cdn.com/v4/letter/s/e9a140/32.png) [@smiling\_bandit](https://boards.straightdope.com/u/smiling_bandit)\ **Post date:** [September 2, 2010, 1:39am UTC](https://boards.straightdope.com/t/gop-should-let-small-business-bill-through/552049/33 "2010-09-02T01:39:11Z")
> [@Snowboarder\_Bo](#): > > What parts of the bill do you think will be ineffective at achieving the goals outlined for reasons for passage? Do you think these parts are poorly worded and so can’t be properly acted upon, or that the actions themselves will be unsuccessful? Or is there another direction that you think this bill should have taken? > > What should be written differently to better accomplish the goals of the bill? Or do you think the reason for the bill itself is also spurious and think that no bill addressing these concerns should have been written? Short: Making credit available to small businesses is nice, but this bill is indirect, insufficient for the purpose, and fails at the primary need. And at the cost of effectively increasing taxes, it may create a net decrease in economic activity. Longer: The bill actually gives lines of credit to _banks_ making loans. Aside from putting the government on the hook (and despite what it says, depending on other interest rates the Treasury could take a huge bath on this, not a gain), there’s little there to make sure it actually goes to small businesses. The banks could easily take the cash and lend it to, because the restrictions on portfolios are pretty light. Plus, it’s not entirely clear how the bill actually defines small business. I expect to see the money (very indirectly), go to big businesses. And it will be of great comfort to the bankers. Further, it is an Utter Fail because small businesses, though facing tight creit, are much more worried about weak demand and uncertainty - the later msotly caused by the government. The tax and investment section could be nice, but capital gains taxes are not what real small businesses are mostly worried about. Most don’t have stock, and this just artificially makes them more attractive to investors without repairing the ground issues. The other subissues I don’t really have an opinion upon. The tax code needs a complete overhaul, not patches. Likewise, increasing business deductions is nice, I guess, but it’s a minor change either way. Smal business owners aren’t going to change their investments and strategies over this. The tax increases are pretty pointless. I’m dubious about the tall oil clause because I’m not certain that _any_ of it should qualify for the credit. This calls for a much more significant patch than is here, or it doesn’t need to be changed and is a stealth tax increase. The second item is praobably pointless because I really, really doubt it will actually change the tax gain. There are always other loopholes - and your Democratic friends use them all. I really, really doubt this will actually be revenue neutral, much less positive. ---
**Author:** ![FasterThanMeerkats](https://avatars.discourse-cdn.com/v4/letter/f/278dde/32.png) [@FasterThanMeerkats](https://boards.straightdope.com/u/FasterThanMeerkats)\ **Post date:** [September 4, 2010, 12:39am UTC](https://boards.straightdope.com/t/gop-should-let-small-business-bill-through/552049/34 "2010-09-04T00:39:39Z")
Shouldn’t the tax loopholes be closed anyway? This kind of sounds like, “We found some more money, let’s go spend it!!!” I’m all for encouraging access to capital for businesses, but shouldn’t government lending policy and revenue collection be completely separate decisions? If the loan program is NPV positive for the country, the government should just sell bonds like it does for everything else. In business cash is fungible. You don’t explicitly pay for one project with the cash from another. If there’s a capital outlay that makes sense, you don’t increase your current prices (because they should already be optimally priced anyway). You just go raise new capital. Or… are the “loopholes” not really loopholes, with closing them being an underhanded tax increase? Don’t know, just asking. ---
**Author:** ![DanBlather](https://avatars.discourse-cdn.com/v4/letter/d/f4b2a3/32.png) [@DanBlather](https://boards.straightdope.com/u/DanBlather)\ **Post date:** [September 5, 2010, 3:54pm UTC](https://boards.straightdope.com/t/gop-should-let-small-business-bill-through/552049/35 "2010-09-05T15:54:40Z")
May favorite part of the narrative is this: “The Democrats have just about enough votes to prevent the Republicans from using outmoded, anti-democratic procedures to prevent a vote on bills that would pass by a simple majority. Therefore when virtually all Republicans prevent a bill from reaching the floor, and are joined by one or two Democrats (and whatever the fuck Lieberman is), it is the Democrats’ fault.” [Previous page](https://boards.straightdope.com/t/gop-should-let-small-business-bill-through/552049.md?page=1)