Senate Rejects Protections for Small Businesses

Kyl cites concerns over impact wage increase will have on small businesses WASHINGTON, D.C. The U.S. Senate recently approved legislation that will increase the federal minimum wage, while imposing approximately $5 billion in new costs annually on the small-business community. U.S. Senator Jon Kyl (R-Ariz.) voted against the bill, citing concerns that it did not go far enough to protect small businesses. "Without Republican tax relief proposals, there would be no help for small businesses, which will have to pay the bulk of the minimum wage increase," Kyl said. "Even so, this legislative package does not go nearly far enough in providing meaningful tax relief for small businesses. The bill only extends current law for three months in some cases, while providing much more significant, and unnecessary, breaks for larger businesses. These modest tax provisions don't come anywhere close to alleviating the impact increasing the minimum wage will have on the small-business community." The nonpartisan Congressional Budget Office estimated that the minimum wage increase would impose $4 billion in new costs on the private sector in 2009 and $5.7 billion in 2010, with the increased costs extending at roughly $5 billion each year. Small businesses would incur the bulk of these costs. According to the Small Business Administration, small businesses represent 99.7 percent of all employers, employ half of all private-sector employees, and account for 44.3 percent of total U.S. private payroll. Small businesses are also responsible for generating 60 to 80 percent of net new jobs annually over the last decade. Kyl offered an amendment early Wednesday that would have increased small-business expensing levels through 2012, which small businesses have identified as one of the most important tax changes that can be made to offset the increased costs of the minimum wage. The amendment lost on a largely partisan-line vote. Kyl also offered a second amendment that would have provided a longer period for accelerated depreciation for restaurants, retail, and other small businesses. It was rejected as well.