The Politics of Small Business

Last week President Obama sat around a lunch table at a sandwich shop in Washington, DC. The topic of conversation: small business. Joined by the shop’s owner and other local leaders in commerce, the casual roundtable demonstrated the president’s renewed focus on small businesses – and the need for new initiatives to stimulate investment and hiring.

It will, ultimately, fall on Congress to decide the fate of Obama’s small business plan. Yet, the question remains: How much impact does it really stand to make, even if it does pass? Most of the president’s initiatives fall into two camps: those that change the nature of what it means to be a public company, and nip-and-tuck tax adjustments that aren’t going to make a huge difference for small businesses.

The most promising of the president’s new proposals are those that would make it easier for small companies to raise money. Current regulations make it difficult for entrepreneurs who use crowd-funding sites like Kickstarter to offer shares to non-wealthy investors. The Obama administration is calling for a framework to allow shares to be sold in this way, ultimately making it easier for small businesses to grow. The President also supports lifting the ceiling of regulations imposed on companies that raise more than $5 million. Instead, those regulations wouldn’t take effect until $50 million.

However, a number of the president’s proposed tax cuts miss the mark. In fact, the CEO of the National Federation of Independent Business, Dan Danner, is quoted as saying that “reforming the corporate tax code does not help the majority of small businesses; in fact, it creates even more uncertainty by taking away the deductions that many small business owners count on each year.”

While the president and House remain at stalemate, we can only hope that what comes out of it will, indeed, give a modicum of positive change for the millions of Americans for whom this decision matters most: the small business owners.

-The WorkingPoint Team