What President Obama Will Mean for Small Businesses and Entrepreneurs

A look ahead at what policies might be coming.

By + More

So it's finally over. Now we can say with greater certainty what issues will be on the table pertaining to small businesses and entrepreneurs.

President Obama is likely to at least consider, if not push through Congress, the following:

  • for small businesses that pay their employees' health care, a refundable tax credit up to 50 percent of the premium. This is likely to be part of a greater health care package.
    • removal of capital gains tax for small businesses and "start-up businesses" (not clear how those will be defined)
      • Obama's proposed $500 "Making Work Pay" tax credit is supposed to reduce the "double taxation" that occurs for self-employed people: they pay both the employer and employee sides of the payroll tax.
        • expansion of SBA loan programs. This is sure to attract political attention with the news that just came out that SBA loans were down 30 percent this year compared to 2007. Obama's platform says he will "work to help more entrepreneurs get loans, expand the network of lenders, and simplify the loan approval process." It's not clear exactly how he would do that. One good guess, however, is that it will resemble the steps laid out by Senators John Kerry and Chuck Schumer in a letter they sent to SBA Acting Administrator Sandy Baruah earlier this week.
          • support for the Employee Free Choice Act, which would make it easier for unions to be formed at small businesses. Check out my article from last week on that topic.  However, as of now it appears that the Democrats will not have enough votes in the Senate to overcome a Republican filibuster on this bill, which is almost sure to happen. As it stands now, each of the remaining undecided Senate seats --Alaska, Georgia, Minnesota, and Oregon--would need to go to the Democratic candidate for the Democrats to have a filibuster-proof majority.
            • Obama wants to spend over $60 billion over the next decade on infrastructure improvements. The issue of how many contracts should be awarded to small businesses has been controversial lately, so I suspect that it will come up again when deciding how to contract out this infrastructure work.
              • Obama also wants to spend $150 billion over the next decade to create millions of "green collar" jobs. We're not sure how he plans to do that exactly, but this could be an important issue for entrepreneurs in at least two ways: First, it could create further interest in things like energy efficiency for businesses. That creates opportunities for entrepreneurs to provide green services. Second, and less optimistic, this money will likely go to benefit large, established interests and could crowd entrepreneurs out of green business opportunities.
              • Anyway, these are just the tip of the iceberg. I'm sure in the lead-up to President Obama's first one hundred days agenda, much more will come onto the table. I'm not mentioning any of these as necessarily good or bad ideas. But let the debate begin!

                small business

                You Might Also Like