WASHINGTON, D.C. - U.S. Senator Jon Kyl (R-AZ) today introduced an amendment to help small businesses continue to grow and create new jobs while absorbing some of the increased costs resulting from raising the minimum wage.

The amendment gives substance to a unanimous "sense of the Senate Finance Committee" resolution calling for tax relief for small businesses above and beyond what was included in the minimum wage legislation now being considered on the Senate floor.

"Small businesses help drive our economy and have played a key role in the robust economic growth we're now enjoying," Kyl said. "The Senate Finance Committee unanimously agreed that more should be done to enable small businesses to grow, create new jobs, and pay for the costs required by the minimum wage increase. This amendment gives members of the Senate a chance to do that."

Small businesses employ half of all private sector employees and created between 60 and 80 percent of net new jobs annually over the last decade [Small Business Administration, www.sba.gov/advo/stats/sbfaq.pdf]. However, small businesses are more vulnerable to the impact of increased costs.

The Congressional Budget Office estimated that the minimum wage increase would impose $4 billion in new costs on the private sector in 2009 and $5.7 billion in 2010, with the increased costs extending at roughly $5 billion each year. Small businesses would incur the bulk of these costs, and they could be forced to lay off workers if offsets are not provided.

Senator Kyl's small business job growth amendment contains provisions that will mitigate the burden imposed by increasing the minimum wage and help small businesses stay competitive. Businesses can only create jobs when they are growing, and one of the most effective ways to encourage business growth is to reduce the cost of new business investment by allowing businesses to depreciate investment costs more rapidly, or to write off the investments immediately. The Kyl amendment will extend the tax provisions relating to leasehold and restaurant renovations, new restaurant construction, and retail improvements through the end of 2008. The current bill only extends these provisions through the first quarter of 2008, which will make it difficult for these businesses to plan renovations to help them expand and grow.

The amendment was offered to S.R. 2 and a vote is expected during consideration of the bill.