Posted by Sung Yoo - President Obama has outlined a plan in yesterday’s speech that offers positive benefits for small-business owners. These include tax cuts for small businesses that hire new workers or raise worker’s wages, 50% lower payroll taxes in the next year, faster payment for small businesses that contract with the federal government and the reduction of red tape that prevents startups from raising capital and going public. A full transcript of the address can be found here.
Though details of the American Jobs Act - as President Obama’s plan is called - are still forthcoming, the speech unfortunately did not outline any specific plans for self-employed individuals. The self-employed should be given all the same tax cuts and regulatory reforms larger companies can take advantage of.
“Being so small means the self-employed often rely on credit or micro-loans to keep their businesses afloat,” said Kristie L. Arslan, President and CEO of the NASE, in an open letter to the President and Congress. “They have watched with envy as large businesses and corporations have benefited from stimulus spending and lucrative bailouts. There was little to nothing in those efforts to help very small businesses jump-start the economy.
“Today’s small business could be tomorrow’s major employer, and even if they choose to stay small, increased entrepreneurship will help foster innovation, create jobs and bring in additional revenue,” Arslan continued. “Help the small-business community fuel the economy with long-term policies, not just short-term fixes."
Though the NASE applauds the president's efforts to spur economic growth, we urge him and Congress to put words into action now. No longer is it enough to simply pay lip service to our nation's smallest businesses - it is time to come up with concrete actions that can go a long way towards helping the self-employed stay afloat and prosper. One thing the president and Congress can do now: Give the country's smallest businesses payroll tax relief, and make it last. The self-employed should not have to pay both employer and employee payroll taxes.
Obama’s proposal, which included calls for infrastructure improvements and the hiring of new teachers, has been met with surprising cordiality from House Republican leaders. Speaker John A. Boehner said the plan merits “consideration,” while House Majority Leader Eric Cantor said via tweet the president’s plan has policies that both sides can work on. The president plans to unveil more details about the proposal in the coming weeks, and it remains to be seen how Congress will react.
Please feel free to comment below or reach us via Twitter or Facebook with your views on President Obama's new job plan and what the administration can do better to help the self-employed. We look forward to hearing from you!