Obama's Budget: A Big Leg Up For Small Businesses?
Not surprisingly, President Obama's recently released budget proposal for fiscal year 2011 has elicited polarized views from the business community. He's beginning to stand up to Wall Street and large corporations, at least rhetorically, while promising much-needed relief for small to mid-size businesses (US News).
Beyond the president's expected populist stance, however, are a few arguably substantive budget proposals for Main Street:
- $30 Billion for Small Business Loans (Reuters): The cash, from repaid TARP bank bailout funds, would be funneled into small- and medium-sized banks with assets under $10 billion. Incentives would include a dividend rate decrease in exchange for increases in business lending. Critics say small banks already have enough money for loans.
- Pledge to Boost Exports (The New York Times): Obama promised to double US exports over the next five years, with the stated goal of creating jobs at mainly small to mid-size businesses. But critics say such a goal might require a further weakening of the US dollar and other moves unpopular with Democrats.
- Tax Credits for Job-Creation (ABC News): The tax credit would cost $33 billion in total, with the goal of encouraging small businesses to hire more workers and increase wages. Businesses would receive a $5,000 tax credit for each new employee hired this year, capped at $500,000 per firm.
- Elimination of Capital Gains Tax (Forbes): The good news is that Obama's proposal to end capital gains taxes on new small business investments would help struggling entrepreneurs stay in the game. Unfortunately, it wouldn't kick in until 2014.
A few other budget provisions also might help small businesses, including the proposal to make the R&D tax credit permanent and a proposal to allow businesses to carry back operating losses.
Related Resources:
- Small Business Taxes (Business.gov)
- Federal Budget Proposal, FY 2011 (Office of Mgt. and Budget)
- Obama Proposes Tax Credit for Small Biz (Entrepreneur)