Today, President Barack Obama unveiled a number of initiatives aimed at helping small business. The proposal would extend, through the end of 2012, the now-expired expanded Section 179 expensing level of $250,000. NSBA supports both proposals as well as the provisions to enhance SBA lending programs and move toward shorter payment times for federal contractors.
Unfortunately, the proposal fails to fully extend the 2001 and 2003 marginal tax rate cuts, only extending for one year the tax cuts for individuals earning less than $250,000. This will result in a likely tax increase for many small-business owners, the overwhelming majority of whom file as pass-through entities and therefore all business income is taxed at the individual level.
“Although the proposal does include some positive language for small-business tax credits, NSBA believes firmly that the only way to ensure fairness, transparency and eased complexity of the U.S. tax code is broad reform,” stated NSBA President Todd McCracken. “And that must also include individual income taxes.”
Access to capital is an ongoing problem for small business. Efforts to expand available capital and improve cash flow, such as the proposal to require 15-day payment times for federal contractors, are positive steps forward. However, it is paramount to actually improving the federal marketplace—a top priority of NSBA—that there are sufficient “teeth” in any proposal.
Earlier today, NSBA released the 2012 Small Business Access to Capital Survey, which found that 55 percent of small-business subcontractors report having received late payments from a prime contractor and 41 percent of prime contractors say they have received late payments from the government.
“While many of the initiatives announced today have merit, the ever-increasing complexity of federal taxes is a growing problem for small business,” stated NSBA Chair Chris Holman, CEO of Michigan Business Network.com and President of The Greater Lansing Business Monthly. “To truly help America’s small businesses, broad tax reform, such as the Fair Tax, must be a top priority.”
Please click here to view NSBA’s 2012 Small Business Access to Capital Survey.