Tag Archive for 'jobs creation'

Navigating the uncertainty of small business taxes for 2011

Several months ago, I wrote an article that was titled, “The enemy of jobs creation is uncertainty.” In the article I identified several issues that were causing small business owners to be reluctant to invest or hire.  One of those things was - and still is - not knowing what the income tax burden will be in the future.  Today, there are several tax issues unresolved that will impact virtually every small business.

1.  The personal tax rate, the corporate tax rate and the capital gains tax rate: We still don’t know what Congress will do with the tax cuts from 2001-03, often called the “Bush tax cuts,” which are set to expire at the end of 2010.  Not knowing the tax implications creates frustration when trying to project profit margins or do retirement planning.  And if we have any assets that we might want to sell in the short-term, we feel pressure to sell them this year, since the cap gains rate may go up next year.

2.  The health care bill:  No one really knows how this new program will impact small businesses, both organizationally, financially or from a compliance standpoint.  Speaking of compliance, one of the big concerns involves the proposed 1099 reporting requirements that is an element of the health care bill. Every small business advocacy organization I’ve talked with in the past few months has said this new compliance requirement will be a nightmare for small businesses.

Recently, we polled visitors to my website about what the government should do with the expiring tax cuts. Over 80% of our respondents said the tax cuts should be extended.  If the government wants to get the economy going quicker, they will do everything they can to help small businesses understand what their future tax compliance requirements are as soon as possible.

Recently, on my radio program, The Small Business Advocate Show., I talked with small business tax expert, Barbara Weltman, about why current tax policies are creating a great deal of uncertainty among small businesses, including the new 1099 reporting provision. Barbara Weltman, is a tax attorney and author of many books on small business tax planning, including the J.K. Lasser series. I hope you will take a few minutes to listen to what Barbara has to say, and be sure to leave your comments. Listen Live! Download, Too!

What President Obama doesn’t get about creating small business jobs

In the two previous posts, I reported on things I liked about President Obama’s State of the Union speech and my critique of his specific small business jobs-creation ideas.  In this post, I predict that all of the tax credits, bank loans or other policy gyrations designed to influence small businesses to create new jobs will fall woefully short of a successful result because none of these issues are the reason businesses aren’t creating jobs. The reason for sluggish jobs creation is best described by paraphrasing a recent movie title: Mr. President, we’re just not that into your policy initiatives.  Here are the two issues Obama doubled-down on in his speech that are in direct conflict with his hope of new small business jobs.

Health care reform: Most Main Street small business owners will be reluctant to hire new employees as long as Obama and his party’s leadership push a health care reform agenda that sounds confusing at best and prohibitively expensive at worst.  Mr. President, if you want more small business jobs, scrap the current health care reform bill in Congress and start over with market-based solutions that make health insurance portable by giving tax advantages to the individual rather than the 20th century model of deductions for the employer.

Climate change legislation: America’s businesses, large and small, are already the most carbon-efficient in the world when the appropriate measurement is ascribed, per dollar of GDP.  Mr. Obama should congratulate businesses for this and encourage more of the same, instead of deriding and demotivating the marketplace with his climate-change policies that cause small businesses concern over what will happen to their energy budget if the current climate-change legislation is passed. 

President Obama, your current strategy for motivating small businesses to hire more people won’t work. You need better small business advisors who can prevent you from embarrassing yourself with statements and proposals that demonstrate how out-of-touch you are with Main Street.

Recently on my radio program, The Small Business Advocate Show, I reported in more detail on these issues. Take a few minutes to listen and, as always, let me know what you think the government can do to help small businesses hire more people. Listen Live! Download, Too!

What I liked about Obama’s State of the Union Speech

During President Obama’s 2010 State of the Union speech he identified a number of issues that I give him high marks for. Here is my list:

Tax incentives for new hires:  The president proposed tax credits for new hiring by businesses. This is a great idea, but it’s about a year late so he needs to get this passed right away.

Free trade:  He included the need for more free trade agreements, including the one with Columbia that has been stuck in Congress for years.  He’ll have to fight forces in his own party to get this done.

Energy:  I give President Obama a high-five for proposing more nuclear power in America’s future, plus more drilling for our sovereign oil and gas deposits.  Again, he’ll have to deal with his own folks to make this happen.

Iran:  Mr Obama fired a shot across the bow of Iran; I have already predicted he would get a chance to make good on this stance in 2010.  If I’m right, we won’t have to wait long to see if Obama has the stones to back-up his rhetoric with action.

Recently, on my radio program, The Small Business Advocate Show, I talked about all of these issues.  Take a few minutes to listen and let me know what you thought about this speech. Listen Live! Download, Too!




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