President Obama knows he has to help small business if the economy is going to recover. He made four major proposals directed at small business in his State of the Union speech.
Rhonda Abrams at USA TODAY takes a closer look and sees what needs to be done to make them really work.
Tax credit for creating new jobs or raising wages. In the past, the president has suggested a one-time $3,000 tax credit for creating a new job. Some have said this won’t be enough to motivate hiring. Instead, I’d suggest a larger amount over a number of years — perhaps 25 percent of the first year’s salary, 15 percent the second, 10 percent the third.
Moreover, I’ve advocated for a substantial (25 percent to 33 percent) tax credit for hiring your very first employee. More than 20 million businesses have no employees, and a big tax credit for hiring your first employee would get a substantial number of these to finally take the step toward long-term growth.
The president also mentioned a tax credit for raising wages. Do this carefully. I’ve given good wages for years, and I’m not going to be happy to see a miserly business owner get a tax windfall for finally doing what I’ve done all along.
Photo by slonecker.