WASHINGTON, D.C. - Congress should extend the increased Section 179 expensing limits for small business, according to testimony today by Jim Henderson, Rocky Mountain Regional Advocate, before a Colorado field hearing of the U.S. House of Representatives Committee on Small Business, Subcommittee on Workforce, Empowerment, and Government Programs.

Testifying at the Ft. Collins hearing Henderson said that the increased Section 179 expensing limits are “having a significant positive impact on small businesses because it increases their cash flow and dramatically reduces the paperwork necessary to account for the capitalization of purchased business property.”

Moreover, since the previous more restrictive limits will go back into effect in 2008, Advocacy “believes the expensing limits should be extended as called for in Chairwoman Musgrave’s legislation H.R. 1678” and that “ultimately Advocacy hopes the limits will be made permanent” as called for by President Bush.

Advocacy research shows that increasing marginal tax rates on business income reduces the chances that entrepreneurs will open new firms while it increases the likelihood that they will exit the market. Further, decreasing marginal tax rates across the board spurs entrepreneurship by increasing the rate of new firm formation and slowing the rate of firm closure.

Extending the increased expensing limits of Section 179 will establish lower tax liability for small firms and thus helps increase firm formation, retention, and job growth.

The Office of Advocacy, the “small business watchdog” of the government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats and it funds research into small business issues.