With a recession looming and job opportunities becoming scarce, many people are looking to entrepreneurship as a new career path.
How will the upcoming American election impact small business owners? Here’s my take on how small business friendly Obama and McCain are:
Obama
- Increase the minimum wage and index the rate to inflation so that it goes up every year
- Wants to eliminate all capital gains taxes for new business start-ups
- Give a $500 credit to business owners to offset the self-employment tax
- Proposes making the R&D tax credit system permanent
- Give a 50% refundable credit for employee health insurance premiums that are paid by the employer
- Suggests that entrepreneurship in rural America is critical – his solution? Create a small-business and microenterprise initiative where investors can get a 20 percent tax credit for $50,000 investments in small businesses
- Require all employers to automatically enroll workers in 401(k)s or IRAs
- Keep the estate tax rate at 45% and increase the exemption limit to $3.5 million
McCain
- Lower the corporate tax rate from 35% to 25%
- Wants to reduce the chances of taxes going up by requiring a three-fifths majority vote in Congress necessary to raise taxes
- Allow small business owners to expense new equipment and technology purchases in their first year
- Proposes creating a permanent ban on Internet taxes (states like New York and Texas are trying to push forward an Internet sales tax initiative)
- Make the R&D tax credit system permanent, but change the formula
- Wants to ban cellphone taxes (federal tax code states business people can only write off the portion of their cell phone bill that applies to business and not personal use)
- Create a tax credit system to allow people to buy personal health insurance that they can take with them from job to job
- Reduce the estate tax rate to 15% and increase the exemption limit to $5-10 million
Historically it has been entrepreneurs and small business owners who have created new jobs and been the driving force behind the economy. If America’s economy is going to rebound it will come from its entrepreneurs investing in new ideas, innovation, and research and development.
Which candidate do you feel is the most small business friendly?
