With the 2012 elections now finished, it’s time President Obama and Congress paid attention to what small-business owners and entrepreneurs need and promote policies that will encourage growth on Main Street.
One step the federal government needs to explore is expanding the range of eligible key investments that are exempt from capital-gains taxes in small businesses — from C corporations to LLCs, consulting, financial services, IT and engineering companies.
According to the Small Business Administration, since the recession hit, the number of new small businesses started each year has decreased. With the unemployment rate as high as it is now, the administration and Congress must focus on galvanizing the small-business community and give the jobless an opportunity to create their own jobs by starting a business.
In many cases, this can be an opportunity to start a consulting business to leverage experience in one industry while looking for permanent employment and developing new skills in another growing industry. A great way to stimulate this type of activity is to provide tax incentives and access to capital to small-business owners and entrepreneurs as they start their new businesses on Main Street.
Another idea that should be considered is allowing small-business owners to deduct more in startup expenses, such as the depreciation on necessary equipment and health care expenses. We shouldn’t make startup businesses and solo entrepreneurs pay both the employer and employee share of the payroll tax. We are trying to encourage, and not discourage, growth on Main Street.
Small-business owners and entrepreneurs will eventually build their companies and will hire more people to support growth as their revenues increase. Handicapping them from the start by limiting deductions and making them overpay taxes and regulatory penalties will not support the growth needed in this sector, especially for minority and women-owned businesses.
Liz Enterprises LLC