A Tax System That Treats Small Firms Fairly

Congressman Grijalva serves on the Committee on Education and Labor, the Committee on Natural Resources, where he is Chairman of the National Parks, Forests and Public Lands Subcommittee and the Committee on Small Business. He has been a public servant for 40 years, advocating for environment, education, and employee rights.

As a member of the House Committee on Small Business; I know our economy is driven by small businesses that can not wait for a comprehensive overhaul of our tax code.

Immediate concerns must be addressed. I have joined my colleagues in presenting a report to congress that initiates a targeted modernization of seven particularly outdated provisions. It is essential that the following proposals be passed so that the tax system treats small firms fairly so they can continue driving our nation’s growth.

• Simplify the "Home Office" deduction provisions. Allow for a reasonable standardized deduction for people using their home as part of their business.
• Taxpayers who can prove substantial business use of electronic equipment to deduct a greater portion of the cost without having to keep detailed records.
• Allow a small business person who uses an automobile for work-related purposes over 75% of the time to recover the true cost of the vehicle (with a price of at least $25,000) during the standard 5-year recovery period. Continue to adjust the price for inflation.
• Allow small firms to use shorter depreciation schedules--that are in line with today's technological and market realities.
• Allow self-employed entrepreneurs to deduct the cost of health insurance premiums in the same manner as large firms.
• Raise the small business limit for deduction of business meals and entertainment to 80% or 100%. Entrepreneurs would regain a competitive edge against large companies.
• Restore incentives to prompt those with capital to invest their money in U.S. small businesses. Investors would get a higher rate of return. Small firms would gain access to needed capital, and use it to grow the economy.