RICHMOND, VA (WWBT) - Congressional leaders say the payroll tax extension will help small business as we start out the new year.
Even though it's only a two month extension, politicians hope it's an issue they can find a permanent agreement on down the road.
Leaders came down from Washington to see how this payroll tax affects small businesses right here in Richmond. It's something they want to see continue to grow.
Josh Kayer has made some big improvements to his cabinet-design company. He says that would have been impossible without help from the Small Business Administration. The two percent payroll tax extension doesn't hurt either.
"Two percent may not be a huge chunk of money but we don't want to give any tax cuts back because we need it all in this economy," said Kayer.
He says after a tough year in 2010, business has finally picked up. That's also due to a $180,000 loan through the SBA. With that he was able to make several investments. He purchased new machines, hired people and even expanded his office to meet customer demand.
That's a move SBA Deputy Administrator, Marie Johns wants to see continue.
"Small businesses are half of our economy and they are great job creators and that's exactly what's happening in Richmond," added Johns.
The SBA and Congressman Robert Scott toured Kayer's facility to see how the loans helped his company. Congressman Scott says banks need to continue to loan money to small businesses for the good of the economy.
"The fact that more people are being hired and the economy is improving will actually improve tax revenue, which will affect the long term goal in improving the deficit," said Scott.
Another long term impact is the payroll tax holiday. The SBA says, on average, the cut saves each business $40 per pay check, which can add up to thousands of dollars over time. It's a two percent cut the administration would like to see continue. .
"Actually it ought to be a formality to get this extension done," said SBA Deputy Director, Marie Johns. "No more drama. No more playing games with middle class Americans' paychecks."
The payroll tax holiday extension lasts through the end of February. Congress will have to come to an agreement on what to do next. Otherwise it will expire.
For more information on other initiatives the Small Business Administration is working on, visit: www.sba.gov.