If there's one thing Republicans and Democrats agree on, it's that small businesses hold the key to economic recovery. Why not give a tax break to small businesses that hire the unemployed? How about a tax break to help small businesses provide health insurance for their employees?
If there's one thing Republicans and Democrats agree on, it's that small businesses hold the key to economic recovery. That's where most new jobs will come from, and anything government can do to help small businesses could help all of us.
For instance, why not give a tax break to small businesses that hire the unemployed? How about a tax break to help small businesses provide health insurance for their employees? How about excluding from taxation 75 percent of small business capital gains? How about expanding the limits on small business expense deductions?
Those are just four of the eight new tax cuts for small businesses already signed into law since the beginning of the Obama administration.
Not enough? OK, how about reducing the capital gains taxes on small business investments to zero? How about a new deduction for health care expenses that are paid by people who are self-employed? Can we increase the deduction for entrepreneurs' start-up expenses? How about limiting the penalties for errors in tax reporting, which are traditionally tough on small business owners who can't afford a team of tax lawyers?
Those tax cuts are almost law. They are four of eight small business tax cuts that have been approved by the House as part of a small business jobs bill. A Republican filibuster stalled the measure all summer in the Senate, but that hurdle was finally cleared this week when two Republican senators joined Democrats to cut off debate. Obama could sign it into law by the end of the month.
Obama also has other ideas waiting for Congress. He has proposed a $50 billion infrastructure development bank, making the research and development tax credit permanent, and accelerated depreciation breaks for businesses.
Such measures surely help, though some have been drawn so narrowly that too few firms qualify for them. But tax advantages alone won't drive small businesses to invest in new hiring. They need confidence that supportive government policies will continue and that the demand will be there for their products. For now, consumers are holding tightly to their wallets, and even companies with ample cash and healthy balance sheets aren't hiring.
If only Congress could write public confidence into the tax laws.
MetroWest (Mass.) Daily News