Hot Topic: Obama’s Small Business Proposals, Updated
by Christina Lee on January 7th, 2009
With less than two weeks until President-elect Barack Obama’s inauguration, small business owners may witness the start of a few changes over the next few months. Keep watching closely to see what develops:
The $300 Billion Tax Cut
Throughout his presidential campaign, Obama has supported the implementation of a middle-class tax cut, amounting to $500 for workers and $1,000 for families. But his latest economic agenda calls for far more money than anticipated and potentially more than ever requested by any president.
Provisions aimed for immediate relief include one that would allow businesses to write off huge losses of 2008 and 2009, while also removing tax obligations over the past five years. Such received broad governmental support, but they also drew skeptical responses from others.
“We do not want to see the past few months repeated, where $700 billion … in loans were provided without any quid pro quo from the recipients,” said B. Sheridan of Andover, Ma. to The New York Times. “The end result: the recipients took the money, buttressed their balance sheets and then announced drastic future layoffs. To repeat that would be unacceptable.”
Some small business owners wonder if, after making strategic budget cuts during the credit crunch, they will receive as much benefits as those that were less prudent. While the U.S. Chamber of Commerce supports this provision, it expressed wariness of others – including a one-year tax credit that made new hires over the past year – in its own stimulus plan.
Entrepreneurial Presence
Small business representation may also take new form. More than a third of the new senators and representatives were once entrepreneurs or venture capitalists, according to the Small Business Administration’s Office of Advocacy.
Many of them campaigned for lower taxes, plus costs in health care and energy. In addition, with their past experiences, some have campaigned for a whole new business direction. For one, Sen. Jeanne Shaheen (D-NH) reasons than the United States should invest time and money into the science and technology industries, rather than manufacturing sectors dominated by China and India.
In the meantime, a change in Small Business Administration leadership has raised questions regarding the wellbeing of a long-neglected agency. While Obama’s nomination, Karen Gordon Mills, has 25 years in venture capitalism, she has close to none in entrepreneurship.
Still, while serving in the president-elect’s transition team, she gained the support – and recommendation – of Sen. Olympia Snowe (R-Maine), who also called for a Small Business Administration cabinet seat. Others have since followed her lead, including the agency’s acting chief counsel for advocacy, Shawne McGibbon.
The editorial staff of Maine’s Sun Journal echoed such support: “In this sense, it is accurate to think of the government’s role going forward as the venture capitalist, putting money into endeavors with hopes of growing business and garnering returns.”
Readers, what do you think of these developments? If all of these proposals are implemented, how would they affect your small businesses?