On October 3, President Obama and Governor Romney met in a 90-minute debate focused on the economy. Questions touched on the economy, taxes, the deficit, energy, and education.
Each candidate talked a little about small business. How much is a little?
If my count is correct, President Obama mentioned the term “small business” six times, while Governor Romney did so eight times. But it was not the number of times small business was mentioned, but the substance of the comments that caught my ear.
I usually don’t get political when it comes to discussions about small business. However, I think some reasoned analysis is called for now.
Here’s my takeaway:
The President referred to Tax Code changes that helped small businesses, stating he lowered taxes for small businesses 18 times (while it is true that there have been some targeted tax breaks for small business, I couldn’t find those 18 separate times).
While saying he would not raise taxes on 97 percent of small business owners, he also referred to Donald Trump as a rich “small business owner.” This statement is perplexing and I’m sure that Trump would probably disagree with the President’s characterization of him. But if the President was basing his remark on the fact that the Small Business Administration (SBA) defines a small business as a company with up to 500 employees, then technically Trump might fit the bill (I haven’t seen his payroll).
What bothers me about the statement is that he could fit the bill. If so, then the President’s agency, in my opinion, should revise the definition of a small business to look at more than just the number of employees and take into account revenues and assets when classifying a company as a small business eligible for SBA-guaranteed loans and other programs.
Governor Romney noted that small business startups are down to a 30-year low and that this is a reason why jobs are not being created to the extent that they should (note that historically small businesses have created 60 percent to 80 percent of all new jobs).
He also pointed out that 54 percent of Americans work for small businesses in which owners pay taxes on profits on their personal tax returns (i.e., at personal income tax rates and not at the corporate rate); raising taxes on “wealthy” owners would further stymie job creation.
Small business owners I’ve talked to have indicated that they are staying on the sidelines when it comes to hiring because they don’t know what it’s going to cost them for doing so—in health care, taxes, and regulations.
Bottom line: It’s easy to say you support small business. It’s like mom or apple pie; no one is against it. But let’s see which candidate can walk the talk! I think that the debate provided an answer, but I’ll be watching to learn what others are concluding.
Barbara Weltman is an attorney, author (with such titles as J.K. Lasser’s Small Business Taxes and The Complete Idiot's Guide to Starting a Home-Based Business), and trusted professional advocate for small businesses and entrepreneurs. She is also the publisher of Idea of the Day® and monthly e-newsletter Big Ideas for Small Business® at www.barbaraweltman.com, and host of Build Your Business radio. Follow her on Twitter: @BarbaraWeltman.