I've gotta admit: I don't listen to many of the messages from Washington, D.C. Instead of worrying about what the government is going to do for our small business, I worry about what our own management team is going to do for our business. Still, President Obama's Small Business Jobs and Wages Tax Cut caught my attention. I wonder: Will it really benefit MSPs and their small-business customers?
According to the President's State of the Union Address, the
"Small Business Jobs and Wages Tax Cut, will put more Americans back to work by giving businesses – particularly small business – a tax cut for new hiring. The new proposal will also provide tax incentives for businesses to expand wages for their employees."Through the Small Business Jobs and Wages Tax Cut, the President asserts:
- Businesses will receive a $5,000 tax credit for every net new employee that they employ in 2010.
- Small businesses that increase wages or hours for their existing employees will be reimbursed for the Social Security payroll taxes they pay on real increases in their payrolls. This bonus would be based on Social Security payrolls, so it would not apply to wage increases above the current taxable maximum of $106,800.
- Firms will be able to claim the credit on a quarterly basis, which gets money out to businesses quickly and provides an early incentive to hire and increase payrolls.
- The total amount of the credit for any one firm will be capped at $500,000, to ensure that the majority of the benefit is targeted at small businesses. Start –ups will be eligible for half of the tax credit.
Smaller ConcernsI certainly applaud the President's commitment to small business hiring. But one of my big requests for the government is to do less -- not more. Less red tape, fewer regulations, fewer hurdles to doing business.
A case in point: During previous career stops, my annual commute put 12,000 miles on my car. These days, I work from a home office when I'm not traveling to industry conferences. I'm essentially a green employee. Yet, New York State recently instituted a commuter tax on me.
Even worse, I'm harassed by government letters and mailings emphasizing I have to pay the tax. And my business partner (Nine Lives Media Inc. CEO Amy Katz) frequently needs to deal with nonsensical phone calls from the State of New York. Memo to State of New York: No worries, we'll pay your small bounty, and all the other head-scratching taxes.
My key point: It's good to see President Obama trying to help out small businesses and talented folks looking for work. But instead of implementing new legislation, maybe it's time to take a look at existing regulations and clean them up... Make it easier for small businesses to DO business. We want to spend less time on the phone talking about government fees -- and less money paying those fees. Instead, we want to spend more time in front of readers and customers. And more time creating jobs or contract opportunities.