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 Friday, October 24, 2008

How Obama's Tax Plan Will Benefit SMALL BUSINESS: Explanation by a Small Business Owner

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Obama would be good for small business


Co-owner, Techne Engineering
Scottsburg, Ind. 47170

There have been several dire editorials about what the Obama presidency will mean for small business. My husband and I own a small manufacturing company located in Scottsburg, Indiana.

Like the majority of really small businesses it is an S-corp, which means that the profit or loss of our company is passed through and taxed as personal income.

Here's how we see that impact.

  • The Obama plan will return to the Clinton tax rate for people earning OVER $250,000 adjusted gross income. Republicans insist that this would impact many small business owners and stifle job growth and investment.

    This is absolute rubbish.

  • Business owners DON'T calculate their net income and then take out those costs. Employee wages and business investment are expenses that are calculated BEFORE a business loss or profit is determined, thus BEFORE income is taxed.

  • Most business owners invest in their companies FIRST when the economy allows it and in their personal income SECOND.

  • Only about 5% of small business owners make over $250,000.

    I would love to have that problem.
What has stifled business growth is the Bush economic policy.

During the Clinton years our company was selected as one of the top 100 small businesses for growth in Indiana. Under Bush, we are weathering our second recession.

The first recession began for manufacturing in early 2001,by the time the Federal government acknowledged that fact our mailbox was filed with auction notices of manufacturing companies liquidating which continued into 2003.

Again, manufacturing activity has been declining since the 1st quarter of 2008 and our company has had to lay off over 45% of our workforce and take other drastic measures to cut costs.

The auction notices are filing up the mailbox again.

The Bush trickle down economics and the policies that John McCain is espousing will only continue to help the Wall Street elite.

Even the McCain /Palin "Drill Baby Drill" policy will be most beneficial to Halliburton and its oil drilling equipment subsidiaries.

I guess they aren't making enough in Iraq.

Obama has an excellent comprehensive plan for small business.

( which addresses needed reform in lending through changes in the SBA program. This would help with expansion, operating capital, refinancing and even selling a business. Capital gains tax would be eliminated for investments in new or small businesses.

Small business needs a fair trade policy where the Chinese are not allowed to dump goods in the US for less than domestic manufacturers can buy material.

The current productivity figures (which McCain calls an economic fundamental) for the US are a sham.

American workers are not more productive than ever. Productivity figures simply reflect the fact that many products are being either assembled here with parts coming from oversea or just packaged or distributed in the US rather than made here with American labor.

Obama is offering a $3,000 per employee hiring credit for 2 years and expanded domestic production credit.

Lastly, small business needs to be out from under the burden of healthcare so that we can be competitive in the global economy. Small companies have very little choice in healthcare plans and only one worker with either diabetes, heart problems or cancer can make our rates go through the roof.

McCain's plan would take youngest and healthiest workers out of the company plan and leave the most expensive people to insure at a much higher cost. My company would drop insurance for employees under the McCain plan and a number of those people would not be able to get or afford insurance regardless of the McCain tax credit.

Obama's plan covers catastrophic illness while giving additional tax credit to employers.

I would prefer a true single payer system but this at least takes the most expensive part of the coverage off our books.

The last 8 years of Republican government has been devastating for small business.

Just look at all of the businesses that have recently closed in Louisville such as Cissel's Manufactruing, Primo's, Park Place, Brownings and Baer's Fabric. Scottsburg has lost over a 1000 manufacturing jobs during the Bush years and it is a county of just over 25,000.

John McCain has admitted that the economy is not his thing-he can't even use email.

The economy obviously wasn't Bush's thing either.

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