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Senate passes bill to provide relief for small business

By Hal Miller
Published: September 16, 2010
Senators voted 61-38 Thursday in favor of a bill which could bring tax credits to small business and improve access to capital.

All Democrats and two Republicans voted to approve the bill, which had been mired for the last month in bipartisan bickering.

At the core of the bill is the creation of a $30 billion lending facility that would direct taxpayer money to regional banks on the condition they lend it to small businesses.

Banks would have to volunteer to participate in this program, and the rate of interest they are charged on the public funds would depend on how much they increased their small business lending.

The bill also includes about $12 billion in tax breaks, including the ability to write-off of 50% of new equipment purchases in 2010 starting immediately for small and large businesses. It would double, to $500,000, the amount of new investment that small businesses are allowed to expense in 2010 and 2011.

The legislation also allows the self-employed to deduct health insurance costs for themselves and their families. It also removes employer-provided cellphones from a list of items that can be taxed as fringe benefits.

The House must still vote to approve the bill before it is sent to Mr. Obama for his signature. Reports say the House is likely to take up the measure next week.