Bennet celebrates Dem-backed small business legislation
DENVER– At InterTech‘s spanking clean plastic molding factory in an industrial park near the airport here, Sen. Michael Bennet and Intertech President Noel Ginsburg celebrated the effects of small business legislation supported by Congressional Democrats and signed into law by the President at the end of September.
Ginsburg pointed to $850,000 worth of new machinery he acquired with cash available through tax savings. He said he was able to win new work for his roughly 85 employees and rehire workers laid off last year.
Bennet used the case to try to give shape to policies he has supported as a senator this year. In talking with reporters, he sought to pull discussion about business down from the static and abstract realm of left-right political cliches.
“What I don’t believe is good for Colorado and for our families is a bunch of talking points and theoretical policies invented by right-wing Washington think tanks. What I do think is good for Colorado are the practical discussions arising from people like Noel… and that’s what I’m fighting for in Washington,” he said.
The small business legislation set aside $30 billion to fund loans and put in place eight immediate tax cuts amounting to $12 billion. The tax cuts include a “accelerated depreciation” $500,000 new-equipment write off, zero capital gains tax for small-business investors, a $10,000 deduction of start-up costs, and 100 percent tax deduction on the cost of health insurance for entrepreneurs.
Bennet was surprised to learn that InterTech had already benefited from the accelerated depreciation provision of the bill. “Excellent,” he said to Ginsburg while swinging his fist across his chest. “That’s awesome.”
“That part of the bill [allows] small business owners buying heavy equipment to expense the cost– to write down that expense more quickly– which is a way of allowing them to enjoy more cash flow, so that they can actually run their business…. What happened here is exactly what we were trying to do.”
Ginsburg, a supporter of education initiatives who knew Bennet when Bennet headed the Denver Public School system, said that one of InterTech’s large longtime customers last year closed its plant in Colorado and relocated to Mexico, forcing layoffs at InterTech. Recently InterTech won a large contract from a new customer but had to buy new machinery to do the work.
“Credit is still very difficult to get. It’s been a real struggle to grow because the capital just isn’t there yet. We used the money we would have paid in taxes to invest in the business. ”
Ginsburg said it pained him to watch day after day this year as lawmakers in Washington faced off on crucial legislation while the recession and collapsed financial markets strangled business.
“Watching the depreciation bill keep getting delayed… what hurt was that for political reasons we weren’t doing things to move the country forward,” he said.
Ginsburg launched InterTech 30 years ago as a school project when he attended the University of Denver. He lamented political policies he believes have strangled his industry ever since. He said up to 60 percent of the plastics molding industry in Colorado has moved away.
“That great sucking sound has pulled jobs to China and Mexico for decades,” he said, referencing anti-Nafta 1990s independent presidential candidate Ross Perot. “Fair trade only makes sense up to a point. How about free and fair trade? Now that makes sense.”
“The more we outsource our jobs, there’s not going to be anyone left to pay for the products we manufacture. There has to be balance and integrity in the debate. It’s the biggest lie we’ve been telling our country for the last 10 to 15 years: ‘I’m gonna lower your taxes and it’s going to trickle down.’ It didn’t trickle down.”
Bennet’s GOP opponent in the neck-and-neck race for his Senate seat, Weld County DA Ken Buck, opposed the small-business bill. Although his campaign didn’t return messages, some Congressional Republicans argued against the bill by saying that small businesses would benefit more from spending cuts and an extension of the Bush-era tax cuts. Others cast the loan fund provision as another bank bailout, saying it would lead to risky loans.
Bennet dismissed assertions that Democrats, by supporting policies for instance that raise renewable energy standards, are unduly interfering in the market and unfairly “choosing winners and losers” in business. He said the government has been choosing winners and losers for a long time at the expense of American workers.
“The current tax code gives companies that ship jobs overseas a tax benefit. It allows them to write off the cost of shutting plants here in the United States…. Those are the kind of things we need to fix in order to make sure we’ve got manufacturing jobs here in Colorado and all across the country. We’ve been asleep at the switch the last ten years.”
“The current tax code reflects a lot of incumbent interests… not the interests of innovators, not the entrepreneurs for the 21st century. [Republicans] want tax breaks for the very largest multinational corporations.”
Bennet said the current dominant political frame, where the Republican Party is seen as pro-business low-tax party and the Democratic Party as the anti-business high-tax party is a “false narrative.”
“I’m the only person in this race with any business experience at all and that’s the way I approach these questions.
“There are television ads running against me that say I raised taxes. But 98 percent of Coloradans got tax cuts since the time I’ve been in the Senate and a lot of those are small business tax cuts. The [depreciation] bill represented $12 billion of tax cuts for small businesses… The likelihood of that new piece of equipment being on the floor here [at Intertech ] without that tax cut is pretty remote, and certainly [InterTech’s] cash flow has benefited as a result of the bill.
“So the narrative is a false narrative. What you are seeing, I think, is a Washington that is broken because there are a whole bunch of backward-looking special interests holding up progress because the current economic incentives in the tax code and other places benefit them to the detriment of our smaller businesses, our innovators, and ultimately to the detriment of the American people.
“The choice in this election is blindingly clear,” he said. “It’s between someone who wants to work shoulder to shoulder with people like Noel or someone who wants to perpetuate the same policies that have resulted in this incredible economic drain the country has faced.
“Having a set of tax policies that inspire people to do exactly what you’re seeing InterTech do here will make us more competitive.”