Kerry’s Stimulus Package Aims to Boost Small Business
by Danny Brown on February 12th, 2008
With the US economy going through a widespread malaise at the moment, and a dollar that’s struggling to stay ahead of many of its once lesser counterparts, it’s been a tough time for businesses. Especially small business owners, who often rely on a strong dollar to make any profits. Therefore, when Senator John Kerry announced an incentive to help businesses, it couldn’t have come at a better time.
Kerry’s economic stimulus plan targets small businesses over larger ones, and its key features include tax incentives for small businesses, offering double funding for specialist micro loans, and reducing the overall fees that businesses are normally charged on loans.
By doing this, it’s intended that small businesses will benefit from various tax incentives. For example, the amount of taxes that you can now write off for new investment has increased from $125,000 to a hefty $200,000, a substantial increase by anyone’s standards. The net operating carry back period for losses will also increase, rising from 2 years to 5 years if your year ends in 2007 or 2008.
One of Kerry’s key objectives for this new package is to help increase small business success rates, by encouraging them to use federal loan packages as opposed to higher priced business loans or even credit card expenditure. It’s certainly an area that is important to all Americans, and not just business owners. After all, small businesses now account for employing over half of the workforce in the US today, so it’s not as if it’s just a small part of the economy.
However, as good as the package and the various incentives seem, not everyone is a fan of the idea. Detractors claim it’s just a short-term fix, and won’t actually see any worthwhile results. One of the biggest detractors is Chief Economist of the Small Business and Entrepreneurial Council, Raymond Keating. He feels that the package doesn’t offer enough to allow business owners to re-invest in their business, which has always been the proven method of growing your company successfully.
His preferred alternative (and one that many others are backing) is the Economic Growth Act of 2008, which Keating claims allows all companies to put capital expenditures down as expenses. This would help the economy become, and stay, more competitive, as well as indexing capital gains and lowering income tax for companies.
There’s no doubt that both sides have a valid point, and that one of them will be more suited to your own company. Although it might be a little longer before you see your company benefit, at least the people that matter when it comes to helping you succeed are making the effort.
