Last week I like the rest of the world, sat watching President Obama delivering his State Of The Union speech. And it missed the mark for me.
Like 23 million other small business owners across America, I watched in anticipation for the nuts and bolts of what the small business stimulus package might do for me.
A $5,000 tax break for any small business that employs someone in 2010
Well it sounds good, but the business owner still has to front the salary costs and more importantly have something for the new employee to do. This is not about paying tax, in order for a business owner to hire;they have to get over the fear of employing people. However I can see this being a great handout to corporate America as they put those staff on this year they had already budgeted to employ, what a great windfall. Hmm, I wonder if the banks will get the same break.
A small business finance package
This is the proposed redistribution of US$30 billion that was repaid by Wall St to help regional or community banks offer credit to small businesses to keep them afloat. Does this just mean easier lending terms? The Small business owner will still be the same risk no matter who lends it to them, with many insolvent or borderline Chapter 11, or worse facing bankruptcy. Will the US$30 billion underwrite the bad debts for unrecovered loans from these regional or community banks? Or will the initiative put us back in the same spot? That is, lending to those who cant pay it back.
A commitment to ‘slash the tax breaks to keep jobs at home’
The reality is that its US$20 a week for someone to work on the production line in China or India or Sri Lanka, and, at best, 15 times that in the US on minimum wage.
Tax cuts won’t mean a thing to the big business operator that has 2000-plus of these workers in a sweathouse in backwater Beijing.
A proposal to remove all capital gains tax on small business investment
This is great news for small business. And I am all for this.
But there needs to be a plan on how is he is going to pay for this cut.
And last but not the least of the highlights, a proposal to offer tax cuts to all business on capital investment
This is the one thing that I did get as a small business person, an excellent incentive for growth in my view.
Like many, I too have been putting off that new ‘something’ in my business making do with what I have. This is the first item of the small business stimulus package proposal that actually got my attention as being something that might just help me in 2010.
At the end of the day, I believe small business will be the thing that stimulates small business.
Let the pollies all scrap around in the background waiting for us to shift the market so they can take credit for the wonderful strategy they put in place to stimulate business, right up until it crashes again and they blame the banks.
To President Obama’s credit, he did put forward numerous ideas and strategies moving forward and he did call for unity from both parties to have some of these things passed so they can actually get things done in 2010, something we have not seen so far with the Health Bill.
Time will tell if the State Of The Union will in fact unite Capitol Hill.
Troy Hazard is the former global president of the elite Entrepreneurs’ Organization, and Switzers’ resident alien in the United States. He has owned managed and run ten companies in the last two decades; is an international speaker and author of The Naked Entrepreneur.
Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.
Click here to subscribe to the Switzer TV channel on YouTube and keep up to date with all of our shows.