With Stimulus Package, the Big Winner Could Be Small Business

Businesses, large and small, will be directly helped by the new economic stimulus legislation passed by Congress last week. But small businesses, in particular, may get the biggest lift indirectly — from consumers spending their tax rebates.

Aid for Business in Stimulus Package (February 13, 2008) The $168 billion measure, which was approved by both houses of Congress with uncommon swiftness, includes rebates for taxpayers and incentives for businesses, all intended to bolster the sagging economy. President Bush is expected to sign it this week.

Bars, restaurants and other retailers are counting on increased business from consumers who will start getting their tax rebate checks in May. “That’s where small businesses will benefit the most,” said Barbara Weltman, a lawyer and small-business tax specialist in Millwood, N.Y.

Smaller companies like Dahm Trucking in Woodstock, Ill., and McCutcheon’s Apple Products in Frederick, Md., are poised to benefit from the provisions aimed at businesses. The National Federation of Independent Business, an advocacy group in Washington, lobbied on their behalf.

“Small businesses are doing better than the rest of the economy,” said Dan Danner, the group’s executive vice president. “They are one sector that continues to create jobs, but they are not doing as good as they could do. If you’re going to stimulate the economy, this is the group to help.”

The legislation helps businesses in two ways. It gives companies a 50 percent bonus deduction on new equipment that would normally be depreciated over many years. And it increases — to $250,000 from $128,000 in 2008 — the limit on expenses that small businesses can deduct from annual income, with a total cap of $800,000.

Click here to read the full New York Times story.