WIPP’S ECONOMIC STIMULUS PACKAGE

Presented to Bush Administration on WIPP State of Union Conference Call
                                                            12/17/2002

• HEALTH CARE:

• Health care is a major concern for women and minority business owners.   Without the ability to offer health insurance, they cannot attract top employees and are not competitive – thus have difficulty expanding their businesses and slowing their rate of bringing innovative services and products to the marketplace.   WIPP supports the full deductibility of health insurance now.
  
  
• We have a growing concern over the number of our employees who are uninsured.    This is detrimental to small business owners, causes unnecessary lost time at work and is a problem of major proportions in our country.   To facilitate the resolution and insure the uninsured that are employed, a bottom line “individual” tax credit should be considered.  WIPP suggests a $2,000 tax credit on the bottom line for all uninsured working Americans.  This deduction could be applied towards payment of insurance premiums with proof of purchase.

• The payroll tax is the most regressive tax employees pay.  An exemption from Social Security taxes would be of immense benefit to America’s lowest paid workers.  WIPP members believe that exempting the first $20,000 of wages from the social security component of the payroll tax would raise take home pay by more than $1200 a year.  If the exemption were applied to the employer’s portion, employers would be in a position to pass some of their savings on to their workers in the form of pay raises or health insurance.  For low paid workers, though, the Social Security levy is especially onerous because it’s levied on the first dollar earned. 

• Tax Incentives for New Businesses:  Tax incentives aimed at people who want to start businesses over the next two or three years would help the economy without widening the deficit.  WIPP’s suggestion is the first two years for these small, entrepreneurial start-ups would be tax free.  The third and fourth years would be taxed at half the normal corporate rate—and any stock sold by employees, founders or owners during the first two years would be taxed at half the normal capital gains rate.  The plan wouldn’t contribute much to the deficit because most start-ups don’t make much money in the first couple of years any way, and wouldn’t be contributing much in corporate taxes.  Yet they would—on their own and without any added incentives or requirements—create new jobs and new individual taxpayers.  

• Relieve taxpayers who have suffered from fraud from income tax to be paid on 401k/Keough investments.

• A tax incentive for losing a key employee to the Military Reserves to help with financing valuable employees returning to serve the country.
  

·        INVESTMENT TAX CREDITS:


o       An Investment Tax Credit for purchases of new equipment by small businesses would be a tremendous incentive for these firms to upgrade their capabilities n-o-w. By lowering the "tax due" line, they will increase their cash flow.


·        ACCELERATED DEPRECIATION:

o       Double-declining balance depreciation on this equipment, will allow the small businesses to deduct more expenses, more quickly, thus lowering their taxes, and increasing their cash flow.



·        BUSINESS DEVELOPMENT EXPENSE:


o       Restore the Business Development Expense (BDE) provisions of the "old 8(a) Program". Make these payments for "extraordinary equipment and services" available to Women-Owned-Business, and others of the "designated classes" of small businesses.


o       These payments will cause a dramatic increase in the cash flow of small businesses.


·        ADVANCE PAYMENTS:


o       Advance payments are "provided for" in Government contracting. However, most all Government Agencies are loath to use them. The application of this provision would enable small businesses to receive a portion of their future payments, in advance.


o       These payments will cause a dramatic increase in the cash flow of small businesses.


·        Take a Cabinet Secretary (or Top Procurement Officer, Deputy Secretary, or Assistant Secretary) To Work Day:
           
o       WIPP proposes allowing members of the Administration to experience what it is like to operate a small business.    A Cabinet Secretary (or Top Procurement Officer, etc.) will have the opportunity to spend a day with a small business owner, and the small business owner, in turn, will be invited to spend the day with them in their environment.  This will allow them insight into the problems small business owners face on a daily basis and open the opportunity for true dialogue on the issues and potential solutions for the daily problems experienced in the small business environment.  Should this initiative occur, we would hope that WIPP members would be 60-% of the participants.  


Women Impacting Public Policy is a national bi-partisan organization representing over 300,000 diverse women in business and women business owners.  Contact Terry Neese, President of WIPP at 405.943.4474 or tneese@wipp.org.