Senators push tax break for business purchases

WASHINGTON (Reuters) - Two key senators introduced a bill on Monday that would provide businesses with a bigger tax break for machinery and equipment purchases, a move they hope will help boost economic growth and create jobs.

Senate Finance Committee Chairman Max Baucus, a Democrat, and Senator Charles Grassley, the top Republican on the panel, introduced the legislation saying it will help small businesses, a sector that has been struggling in the slow economic recovery.

“This tax cut provides a double benefit by creating an opportunity for small businesses to purchase new equipment while also helping the companies that manufacture and sell equipment to small businesses,” Baucus said in a statement.

The bill would extend through 2010 provisions that expired at the end of 2009 that allowed businesses to more quickly write off on their taxes the purchase of new equipment and machinery.

The proposal is likely to be made a part of a package of small business lending proposals and tax breaks that lawmakers hope will help create jobs and reduce the stubbornly high 9.7 percent U.S. unemployment rate.

President Barack Obama is also pushing for creation of a $30 billion fund to help community banks make loans to small businesses. That proposal has cleared the U.S. House of Representatives along with a package of small business tax incentives that includes bigger tax breaks for start up costs.

The Senate is expected to take up its version of the small business package in the next several days.

Reporting by Donna Smith; Editing by Leslie Adler