Small businesses – everything from restaurants and barbershops to small manufacturing firms – play a critical role in our nation’s economy. Fifty percent of Americans work in businesses with fewer than 250 employees and thirty-eight percent work for businesses with fewer than 100 employees. Unfortunately, the Bush Recession hit small businesses especially hard and, unlike in past recessions, they are not yet leading the economic recovery.
Republicans often loudly claim that they care about small businesses. But when it comes to actually fighting for small business, it is President Obama and the Democrats that have a track record of success. For example:
- Increasing Access to Credit for Small Businesses: A perfect example of the difference between Democratic action for small businesses and empty Republican rhetoric is the small business stimulus bill that the Senate passed yesterday. The bill will provide a $30 billion lending fund, run through community banks, to increase small business’ access to credit, and provide $12 billion in tax breaks for small businesses. President Obama first proposed the legislation in February 2010, but Republicans in the Senate filibustered it for months (a total of two Republican Senators, one of whom is retiring, voted to end the filibuster). Such delay hindered the ability of small businesses to make the types of investments that would promote our economic recovery.
- Making Health Insurance Affordable for Small Businesses: Small businesses have been faced with significant increases in health insurance costs over the past few years, and now pay approximately 18% more than large businesses for the same coverage. As this New York Times article explains, the health insurance reform legislation passed by President Obama and the Democratic Congress (over unanimous Republican opposition), included significant provisions to help address this disparity and protect the ability of small businesses to provide health insurance to their employees. Approximately 84% of small businesses are eligible for tax credits of 25-35% under the health insurance reform legislation this year, and will be eligible for a 50% tax credit once the health insurance exchanges open in 2014. Approximately 16.6 million people work for the firms that are eligible for this support, which is expected to amount to approximately $40 billion over the next decade.
- Reducing Taxes for Small Businesses: As I’ve explained here previously, President Obama is proposing a tax cut for all individuals and small businesses on their income under $250,000 per year. Republicans, however, are holding that proposal hostage in an effort to also give an extra $103,000 on average to individuals and small businesses earning more than $250,000 per year, which would increase our national debt by $700 billion over the next decade. The Republican plan would provide no benefit to the vast majority of small businesses as only 3% of them have any income over $250,000 per year. And a large number of those 3% are sole proprietorships – i.e., bond traders, corporate law firm partners, etc. – that technically count as small businesses but do not actually have employees or constitute the type of family-owned businesses that have been hit hard by the Bush Recession.
Over the past two years, President Obama and Congressional Democrats have walked-the-walk on helping small businesses – providing assistance in weathering the Bush Recession, tax credits to help pay for health insurance for their employees, and fighting for tax relief for all small businesses. If you support the Democrats’ record on helping small businesses, write a letter to your local newspaper editor and let people know.