Bush recently proposed doubling, to $200,000, the amount small firms can write off annually for spending on vehicles, computers and other big-ticket items. It’s meant to entice the USA’s small businesses to spend more, while plowing the tax savings back into their companies.But it’s unclear how much additional spending it would inspire. The majority of the nation’s nearly 23 million small businesses are tiny enterprises with minuscule annual revenue and few employees. Many only dream of spending $200,000 on improvements.
Other obstacles, from labor shortages to rising health costs, stand in expansion’s way. About 32% of 1,274 small companies surveyed last month said they planned big investments in the near future, the National Federation of Independent Business (NFIB) trade group said last week. That was little changed from December and down from a 12-month high of 36% in March. For computers and other technologies, small firms are expected to boost spending about 4% this year and next, Visa USA said in a report this month.
Moreover, small firms buy machinery and other capital goods that fit economic conditions and a long-range business plan. They won’t spend just to take advantage of a new tax break.
No comments yet.