Do SMBs Want Obama Tax Breaks or Fewer Barriers to Business?

Do SMBs Want Obama Tax Breaks or Fewer Barriers to Business?

As President Obama proposes tax breaks and new lending programs for small businesses, I have to wonder: Do small business owners and entrepreneurial MSPs really want more help from the government? Or are MSPs really seeking fewer barriers to doing business? Here's what I mean.

Within our own small business (Nine Lives Media Inc.), CEO Amy Katz has spent hours dealing with government regulations and tax laws in Massachusetts (where we're headquartered) and in New York (where my office is located). Most recently, New York implemented a commuter tax that impacted our business. Here's the irony: I don't commute. And I'm actually promoting a green environment by working from home and keeping my car parked in the driveway.

Yet we're dealing with a commuter tax... A year ago, we were dealing with payroll tax questions between New York and Massachusetts. And before that... well, you're starting to get a feel for daily distractions that waste Amy's time and our company's money.

And what about MSPs? Some managed services providers are worried about potential tax issues tied to recurring revenue streams. The debate started in February 2010. I don't sense panic within the managed services community, but I do sense that MSPs are speaking far more regularly with their accountants to make sure they're clear on local tax codes.

Meanwhile, In Washington...

On the political front, President Obama is promoting a bill that would establish a $30 billion fund to help community banks offer loans to small businesses, plus $12 billion in tax breaks for small businesses. Legislators are tentatively scheduled to consider the bill on Sept. 14, according to MarketWatch.

I certainly applaud better lines of credit to qualified small businesses. Still, The Wall Street Journal offered this perspective on President Obama's proposal:
"The chief economist at the National Federation of Independent Businesses said today that small business doesn’t need more tax relief. Instead, he said, Washington should aim its firepower at consumers so they begin spending money and creating demand for the products and services small companies provide.
“If you give a small business guy $20,000 he’ll say, ‘I could buy a new delivery truck but I have nobody to deliver to,’” said William Dunkelberg, chief economist for NFIB.
Rather than aim more tax relief at business, Dunkelberg said Washington should extend the Bush-era tax cuts for everyone – including those making above $250,000."

Put the Spotlight on Success, Not Failure

With or without the government's help, I believe small businesses will pull the U.S. out of its economic slump.

To get started, we need to spend less time listening to what Washington may -- or may not -- do for us. Next, we need the media and the government to focus more on success rather than failure.

Here's an example:
  • During a recent CNBC broadcast, a former inventory manager for a New Jersey car dealership described how difficult it is to find work. He's spent recent months reaching out to car dealerships up and down the East Coast, looking for a new job. I've been out of work and I know how painful it can be to stay motivated during an extended job search.
  • My question: Why is that unemployed inventory manager looking for work in the automobile industry? Wouldn't it be wiser to apply that inventory management skill-set in a different vertical -- say, high-tech distribution?
As the media laments lost industries and Washington debates that small business bill, there are 5000 examples of successful, privately held, fast-growing small businesses in the US.

Skeptical? Just check out the latest Inc. 5000 list, which also contains more than 600 IT service providers.

With a simplified tax code and less government interference, I suspect those 5,000 companies would be growing -- and hiring -- even faster...

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