BY JOE MARVILLI
U.S. Rep. Steve Israel (D-Melville) announced a new bill this week that would give small businesses an additional safety net.
On March 18, Israel visited three small businesses in Glen Oaks, ending the tour with the announcement of the Savings Accounts for a Variable Economy for Small Businesses Act. The legislation would let businesses with less than 50 full-time employees to deposit up to 10 percent of their gross profits per year into a special savings account.
Israel said the bill would act as a 401K or an IRA for small businesses with fewer than 50 full-time employees. By putting up to 10 percent of their earnings into a special tax-deferred savings account, it would lessen the need for businesses to borrow outside credit during slow economic times.
Withdrawing money from the account would also be tax-free if one of three criteria takes place. If the Gross Domestic Product declines for two consecutive quarters, if the SBA designates there is an emergency that should allow a business to withdraw tax-free from the account, or if the community in which the business operates is designated by FEMA as a disaster area, then the withdrawal is tax-free.
Businesses can withdraw from the account any time they want, but there will be a tax included without at least one of those criteria.
“The United States lost 170,000 small businesses as a result of the Great Recession. The big banks, they recovered, but small businesses have not sufficiently recovered,” Israel said. “They’re talking about not only the need for more customers, but the challenges that they’re having accessing credit, to pay their bills, to expand.”
Israel announced the bill after visiting three small businesses along Hillside Avenue in Glen Oaks. He stopped by Clean & Green Laundromat and Milk Farm and Halal Meat grocery store, before holding the press event inside Usha Foods Inc.
The owner of Usha Foods Inc., Anil Mathur, and his son, CEO Abhi Mathur, expressed their support for the bill as well, saying they would take advantage of the opportunity if it goes into law.
Israel plans to introduce the SAVE for Small Businesses Act when Congress’ reconvenes next week.
Reach Joe Marvilli at (718) 357-7400, Ext. 125, email@example.com, or @Joey788.