Changes That Benefit Small Businesses Face Senate

U.S. small businesses stand to benefit from several provisions of legislation that cleared the House of Representatives Mar. 9 by a 257-169 vote. The measure:

  • Increases the cost of equipment that can be expensed (written off in one tax year) to $30,000 from the current $19,000.
  • Reduces the top estate-tax rate to 50% from the current 55% by the year 2002.
  • Repeals a three-month-old law that requires small business owners to make a lump-sum capital gains payment in the year a business is sold -- even if the buyer is paying for the purchase in installments. The House-passed measure, which is part of a larger legislative package that would raise the federal minimum wage to $6.15 an hour from $5.15 an hour in two steps this year and next, must now be reconciled with a competing Senate version and approved by both the House and Senate before it's sent to the White House. Presidential approval is not a sure thing; the White House has signaled its unhappiness with the size of some of the measure's tax provisions.
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