President Obama offered a fresh package of aid to small businesses Monday. A few weeks ago, I accused the president of dropping the ball on such matters.
“You deserve a chance. America needs you to have that chance,” Obama told small business owners at the White House.
The administration detailed various steps to get credit flowing to small businesses.
Glad to see President Obama addressing small businesses as that’s what we have here in Childress.
Obama said over the past decade, 70 percent of new jobs have been created in this sector.
One of the moves to get credit flowing to small businesses includes boosting bank liquidity with up to $15 billion aimed at unfreezing the secondary credit market, reducing lending fees and increasing loan guarantees, and easing the tax burden.
According to the White House, the goal is to help small businesses make payroll, buy equipment and maintain or even expand employment as the nation’s economy is bleeding jobs.
“As President I will continue to do everything in my power to ensure that you have the opportunity to contribute to your community, to our economy and to the future of the United States of America,” Obama said.
Treasury Secretary Timothy Geithner also ordered the Internal Revenue Service to issue a series of new rules for temporary but significant tax breaks, meaning that small businesses:
• That earn up to $15 million will be allowed to claim losses for the past five years in the current tax year;
• May write off up to $250,000 in investments this year.
• Can reduce estimated tax payments to 90 percent of the previous year’s filing.
• Are allowed to take larger depreciation deductions within the first year of property purchases.
• And will see 75 percent of capital gains excluded for those who invest in small businesses.
The administration’s plan also includes $730 million from the stimulus package to immediately reduce small-business lending fees and to increase the government guarantee on some Small Business Administration loans to 90 percent.
Under the administration’s plan, the government will step in to buy SBA loans in the secondary market to help unlock the frozen credit market, using money from the recently passed bailout package in the range of $10 billion to $20 billion.
While the SBA typically guarantees $20 billion in loans annually, new lending this year is on track to fall below $10 billion.
While all of this news is good news for many in rural towns like ours, there are still those wondering about Obama’s proposal to raise taxes in 2011 on individuals earning more than $200,000 and on households earning more than $250,000. There are fears that those provisions also hit small businesses in the same category.
For now, it’s good to see small businesses getting the attention for a change.
Copyright Christopher Blackburn 2009