The Senate signed the “stimulus” bill today and is headed to
a tough conference with the House.
People of differing opinions can have honest debate about whether or not
this thing is going to work, and to what degree. Unfortunately there’s one idea
that everybody seems to like and yet nobody decided to include.
Back in 2001, then-Rep. Jim DeMint championed the BRIDGE (Business
Retained Income During Growth and Expansion) Act, a measure with wide
bi-partisan support that would help get additional capital into the hands of the
small businesses who need it. Better yet, it was devised by an honest-to-goodness
Washington outsider whose company provides services to honest-to-goodness emerging
companies that need help.
BRIDGE would allow small companies with receipts under $10
million to defer up to $250,000 in federal taxes, allowing them to reinvest
that money in their company. The company
would begin repaying the government—with full interest—after two years. Many in
the business community heralded the idea as it would provide a source of
capital for companies that are in the critical stage where they’ve gotten too
big to rely on friends-and-family loans and credit cards, but still too small
to meet the typical venture capitalist or angel investor’s investment
criteria. And it seems like an even
better idea now when small companies find themselves in the same situation compounded
by a credit market that is essentially frozen.
It’s a win-win for everyone. The small businesses that are
the engine of America’s economy get the capital they so desperately need to pay
their current employees, develop new products and services, grow, and hire more
employees. And the government comes out AHEAD in the end since they’re getting
the taxes plus interest.
Unfortunately, this isn’t included in the current stimulus
package and won’t be. Small businesses will continue to struggle, won’t create
jobs, and a bunch will fail. But Alaska has asked for $630 million for
transportation projects, so maybe we’ll be getting that infamous Bridge to
Nowhere instead.