A key to unleashing the economy is to give small businesses a chance to grow and create new jobs. An effort to boost small business is H.R. 9, passed by the House of Representatives last week. I strongly urge California Senators Barbara Boxer and Dianne Feinstein and the entire Senate to act quickly and pass this measure. The bill, known as the “Small Business Tax Cut,” will help small business owners retain more capital, invest in their businesses and create more jobs.

Under the proposal, small businesses would be allowed to deduct 20% of their income from taxes irrespective of how they are organized. This savings can be turned back into improving the business.

The best way to boost economic growth and get people back to work is through small business growth.  Over the past 17 years, small businesses with fewer than 500 employees have generated 65% of the new jobs in this country.

Yet under the current tax code, small businesses are faced with enormous burdens that are sapping their capital. Irrespective of whether they pay taxes at the corporate or individual level, small businesses can face up to a 35% federal tax rate. When small businesses taxes are high, it blocks their ability to reinvest in the business, expand and create jobs.

The effect on California can’t be overstated. As of 2009, in California, there are 691,479 small businesses with between 1 and 500 employees employing 6,541,800 individuals. From 2005 to 2008, small business created a net total of 391,672 new jobs in California. But from 2008 to 2009 a net total of 488,614 small business jobs were lost. Our unemployment stands at a staggering 10%– we must act now.

According to a study from well-known Fiscal Associates, Inc., enacting this tax cut will yield $112 billion more in GDP, create 194,000 jobs, and lead to a 2.24% increase in business capital across the United States. Small business is the lifeblood of our economy and these are exactly the kinds of real solutions that will help our economy recover.

The President’s tax strategy should focus on pro-growth policies that will stimulate our economy. President Obama’s current plan will raise taxes and not create a single job or address any of our economy’s fiscal challenges. The President and Senate should not play political games and act quickly on House-passed legislation that will spur American job growth. Small business owners don’t have time to play political games. Democrats and Republicans should work together to create jobs.

Small business owners are struggling. Their problems are real. It’s time for leaders in Washington to step up and provide this much-needed relief.