As United States President Barack Obama touted his $447 billion jobs bill on Tuesday, September 13th, with a personal appearance in the state of Ohio, small-business owners weighed-in with their thoughts on how it would affect new hiring and the all important bottom line. In a speech before the joint session on Congress on Thursday, September 8th, President Obama promoted the bill as a means to entice small businesses to hire unemployed Americans.
New Jobs Bill Speech
Among those in attendance to Thursday’s speech were small business owners David Catalano, co-founder of the digital advertising agency Modea located in Virginia, and Darlene Miller, owner of Permac Industries, a precision machining company located in Minnesota. The two were quoted in a recent NY Times article after having watched Thursday’s presidential speech live from the House chamber, saying that they would hire new employees based on needs.
In his speech on Thursday, the president laid out a number of tax incentives for businesses to promote investment and specifically to reward hiring. The bill would reduce the employer payroll tax by 50%, to 3.1%, for the first $5 million in wages once implemented in 2012. The proposal would also permit companies to continue to fully write off specific types of property purchases immediately instead of amortizing them over a number of years.
For companies that increase wages in 2012 compared to 2011, the president’s jobs bill includes a payroll tax holiday for up to $50 million in increased wages. This would go into effect for businesses who either increase salaries or hire new employees. The bill also includes tax credits to businesses that hire people who have been unemployed for a minimum of six months: as much as $4,000 for the majority of new hires, but the tax credit amount would jump to $5,600 for veterans and companies could receive as much as a $9,600 tax incentive for hiring veterans who were injured during service.
Small Business Owner Opinions
Mr. Catalano and Ms. Miller both said after the speech that any help to small business would be beneficial. “This just eases the burden, to invest in their education, or do more things for them,” said Mr. Catalano, referring to how the bill would affect small businesses. Ms. Miller of Permac Industries added, “It (the proposed jobs bill) will definitely help small businesses with cash flow.” The tax credits proposed in the $447 billion jobs bill would benefit all businesses. However, the White House said that the payroll tax decrease would target “the 98% of firms that have payroll below” the $5 million limit.
Several small business advocates chimed-in with their views on the jobs bill following Thursday’s speech. The National Federation of Independent Business (NFIB) called the bill “more of the same” because of “the threat of higher taxes and the thousands of pending federal regulations.” NFIB’s president and chief executive Dan Danner stated, “Small businesses need the government out of their way. Tax breaks are always a welcome help to small businesses, especially in these tough economic times. But those outlined tonight by the president are temporary, and avoid the question of meaningful business tax reform.”
Todd McCracken, president and chief executive of the National Business Association (NSBA) opined, “Offering a payroll tax holiday can help all small employers – not just the profitable ones who benefit from an income tax cut – with some much-needed cash while at the same time making it a bit more affordable to bring on new employees.” Both the NSBA and NFIB are calling for less regulations for businesses and an overhaul of the U.S. tax code.
President Obama is scheduled to appear Wednesday in North Carolina to continue promoting the jobs bill.