Main Street revival
U.S. Rep. Chris Collins has signed on with a proposal to let startup businesses in some economically distressed areas defer payment of federal payroll taxes, in order to improve those businesses’ chances of succeeding.
Collins is the first co-sponsor of the proposed Main Street Revival Act, introduced in the House of Representatives last month by Rep. Eric Swalwell, D-Calif.
The act would allow startup small businesses in Historically Underutilized Business Zones to postpone payment of employee payroll taxes for one year, then pay the owed amounts in equal installments over the following four years.
Collins visited downtown Lockport on Tuesday to talk up the act, which he characterized as common-sense, bipartisan and non-controversial. He was joined at a press conference by Mayor Michael Tucker and Niagara USA Chamber director Deanna Brennan, both of whom endorsed the proposal as supportive of much needed local new-job creation.
The thinking behind the Main Street Revival Act is that it would help increase the likelihood of startup businesses surviving the critical first year of operation.
Supposing the annual average payroll tax per employee is $3,000, and a business could defer paying it for five employees, the owner would have $15,000 extra cash on hand to put into marketing, equipment acquisition or something else that helps grow the business, Collins, an experienced small business operator, suggested.
“When you’re starting up, cash is king. ... It’s that first year you’re always out of cash,” he said. “I think (payroll tax deferment) could work. Every little bit helps.”
The act would postpone, not waive, collection of first-year payroll taxes from startup employers. The country cannot afford to waive them, Collins said.
The Main Street Revival Act would not cause any reductions in the Social Security or Medicare trust funds, he added.
“This legislation represents the practical, common sense solutions Washington needs to take to nurture small business development, create jobs and spur real economic development in our communities,” Collins said. “One here, two there, that’s where job (growth) will come from.”
In the act, small businesses are those that would employ 25 or fewer people. HUB Zones, recognized by the U.S. Small Business Administration, are land areas where population density is relatively high and income is relatively low.
In the City of Lockport, most of downtown, and lowertown, compose a HUB Zone, according to R. Charles Bell, director of planning and development.
Elsewhere in Collins’ New York 27th Congressional District, HUB Zones are located in portions of Medina, Batavia, Depew, Lancaster and Livingston County.
According to Collins, proposed legislation is most likely to get to the House floor for up-or-down voting when it has 100 or so co-sponsors. Obtaining them is a priority for him and Swalwell, he said.
See for yourself Look up the text and status of H.R. 952, the proposed Main Street Revival Act, at www.thomas.loc.gov