Departments - January/February 2010
Business First
A Resolution Small Business Can Live With
The New Year is, of course, a time to look ahead and make resolutions for 2010. This is ours: We will work as hard as we can to ensure that the fear, uncertainty and doubt that are dragging down the economy soon will be a distant memory for you.
While there were some encouraging signs recently that the economy as a whole may be turning around, that is not the case for America’s principal job creators. Our most recent Small Business Economic Trends report showed the Optimism Index dropping again. At the same time, more of you reported that you still planned to cut jobs, rather than add them. Few of you thought the business climate was good for expansion.
The primary reason for that attitude has been the political climate. Doubts about the effects of healthcare reform, fears of new taxes, uncertainty about the potential costs of an energy bill with a cap-and-trade program--all of these have contributed to the current situation.
Thus, Washington needs to restore confidence in the country and the economy. That can happen only by creating a positive environment that takes into account both economic and policy factors.
It’s clear that once the healthcare reform debate concludes (see Issue at Hand starting on page 22 for more), the administration and Congress will focus on the economy and creating jobs. Thanks to your input, we know what you need and are pushing several ideas in Washington:
Recognize the threats to small business. The horizon is filled with cost unknowns, from paid family and medical leave to card-check legislation, on down to state decisions about finances. Our policymakers need to come to grips with this reality and help, not hurt, small businesses.
Pass full tax write-offs to encourage new startup businesses and a payroll tax holiday that would put more cash in customers’ hands, as well as businesses. This tax relief is the obvious way to improve both desperately needed sales and balance sheets.
Keep individual tax rates low. Most small businesses pay their taxes as individuals rather than as corporations. A low individual tax rate is important to small businesses of all sizes, so keeping the current low rates from the 2001 and 2003 tax cuts, scheduled to expire this year, is vital to small business’ recovery. Now is not the time to raise taxes on any small business.
Address the current estate tax law, also set to expire after 2010. The uncertainty surrounding this tax is a challenge for many business owners. It means more time and money spent on accountants, attorneys and life insurance. This is all money that could be better spent investing in the business. We continue to support full repeal as the only solution that protects all small businesses.
As you know, the cost of doing business, including taxes, is key to every decision you make. In tough times, these considerations are even more important. With many small business owners still struggling to work their way out of the recession, it’s important for Congress to provide not just short-term incentives and relief, but also long-term certainty about the future. Once Congress does that, entrepreneurs will be more willing to make new investments in their business and begin to create jobs again. That’s a resolution that’s good for everyone.