STATEMENT
Of the Honorable Nydia M. Velázquez, Chairwoman
United States House of Representatives, Committee on Small Business
Full Committee Hearing: “Tax Initiatives that Promote Small Business Growth”
Wednesday, May 5, 2010

“In recent weeks, our economy has shown promising signs of recovery. Gross Domestic Product grew at 3.2 percent during the first quarter of this year—marking the third straight quarter of economic growth.  Consumer spending is on the rebound—March saw the sixth straight month with a rise in individual spending. Most importantly, the U.S. economy added 162,000 jobs in March—the largest increase in nearly three years.   

“The American Recovery and Reinvestment Act fueled much of this progress.  Not only did that measure boost infrastructure spending, it provided billions of dollars in tax cuts—including $15 billion in targeted tax relief for small firms.  Today’s hearing will allow the Committee to analyze how tax policies can sustain and further accelerate our economic recovery going forward. 

“Since the Recovery Act’s passage, we’ve built on its momentum, extending many provisions that would have otherwise expired at the end of 2009. More recently, the HIRE Act was enacted, providing a tax credit for small businesses that bring on new employees.  It also extended a credit for entrepreneurs purchasing business equipment—helping firms to expand and stimulating demand for everything from trucks to computers to machinery.  Our witnesses today will be able to give us an assessment of how well these initiatives are working—and how to improve them.

“In every previous economic recovery, small firms have led the way, creating more jobs and generating them more quickly than their big business counterparts.  Following the recession of the early 1990s, small firms created 3.8 million jobs. After the recession of 2001, micro-businesses alone generated one million jobs. Entrepreneurs will be just as important to bringing our nation out of today’s downturn—but only if they have the right tools.

“While showing promising signs, today’s recovery is in its earliest, most fragile stages.   As our recovery gains traction, it is vital that our tax policy promotes small business job growth—and does not hinder it.  In that vein, it is my hope that today’s hearing will help improve on existing tax programs, while generating new ideas for targeted tax relief.”

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