American Innovation Act Quadruples Tax Deduction for Small Businesses to $20,000
Ensures Small Businesses Can “Create Jobs, Advance Innovation and Invest Back Into Our Communities”
WASHINGTON — Yesterday, Congressman Vern Buchanan, Vice Chairman of the House Ways and Means Committee and Chair of the Health Subcommittee, and Congressman Mike Kelly (R-Pa.), Chair of the Hxouse Ways and Means Tax Subcommittee, introduced legislation to spur American innovation through the expansion of tax incentives. The American Innovation Act aims to remove some of the initial barriers to creating a business, putting money back in the pockets of our country’s best job creators and setting start-ups on a path toward success.
“America’s small businesses are still recovering from four years of Biden’s overspending and runaway inflation,” said Buchanan. “Helping entrepreneurs take their unique ideas from concept to reality will jumpstart our economy and give them a deserved shot at the American Dream. As Congress prepares to address historic tax legislation, we need to focus on making it easier for small businesses to do that what they do best—create jobs, advance innovation and invest back into our communities.”
“The American Innovation Act allows for investments in research and development to help small businesses grow and allow entrepreneurs to take that next step in their American Dream,” said Rep. Kelly. “This pro-growth tax policy will kickstart our small businesses, and it make it easier for these businesses to create jobs, support families, and grow our local economies.”
The American Innovation Act would quadruple the amount of start-up costs small business owners can deduct from their federal income taxes, raising it from $5,000 to $20,000. Additionally, Buchanan’s bill increases the threshold for deductions from $50,000 to $120,000 for start-up expenditures like advertising, employees’ salaries and benefits, rent and utilities for new office space.
In September 2018, Buchanan’s American Innovation Act passed the U.S. House with broad bipartisan support. According to the Small Business Administration, around 50 percent of start-up businesses fail within the first five years. Buchanan’s bill aims to support these small businesses by decreasing their tax burden, giving them more capital to invest back into their businesses.
Buchanan’s bill is cosponsored by Rep. Kelly and fellow House Ways and Means Committee Reps. Ron Estes (R-Kan.), Carol Miller (R-W.Va.), Max Miller (R-Ohio), and Adrian Smith (R-Neb.).
Buchanan has championed the fight to advance American innovation. He is currently serving as Chair of the American Manufacturing Tax Team on the House Ways and Means Committee, which focuses on expanding, revitalizing and reshoring American manufacturing. In addition to introducing the American Innovation Act, he previously introduced the Start-Ups for Cures Act and the More Cures Act to encourage the development of new, American-made medical therapies and cures while strengthening our domestic medical supply chain.
