Recently, President Obama presented an aggressive plan to help small businesses get Americans back to work. The American Jobs Act would provide payroll tax cuts for 98% of businesses, a $4,000 tax credit for hiring workers who have been unemployed for more than six months, and extend the 100% expensing tax credit for large and small businesses.
The plan also includes provisions to expand job opportunities for hundreds of thousands of low-income youth and adults through a new Pathways Back to Work Fund that supports summer and year round jobs for youth; innovative new job training programs to connect low-income workers to jobs quickly; and successful programs to encourage employers to bring on disadvantaged workers.
The President is also directing executive branch agencies to accelerate their payments to small business contractors so they can reinvest that money in the economy and drive job growth. Additionally, the President is tasking his CFO and CTO with creating a one-stop, online portal for small businesses to easily access government services.
On September 7, 2011, before a joint session of Congress, President Obama outlined the details of the American Jobs Act. This act is a package of proposals designed both to spur employment but also has a number of provisions specifically of interest to MBEs. These include:
Extending the payroll tax cut to firms by cutting in half their payroll tax on the first $5 million in payroll. Next year, instead of paying 6.2 percent on their payroll expenses, firms would pay only 3.1 percent.
Extending a provision signed by the President in 2010 which would allow for 100 percent expensing through 2012. This rewards firms for making investments by allowing them to deduct the full value of those investments from their tax obligations.
Small businesses borrow for four principal reasons: starting a business, purchasing inventory, expanding, and strengthening the firm’s financials.
“Small business owners across the country tell me that access to capital remains one of their central concerns,” said Chief Counsel for Advocacy Winslow Sargeant. “The research we are releasing today will add to the understanding of small business financing needs and sources, and will inform policymakers seeking to strengthen the productive small business sector.”
The Finance FAQ is replete with data about where small businesses obtain their financing, including 15 graphs showing types of startup and expansion financing, as well as trends in bank lending, interest rates, venture capital, initial public offerings, SBIC funding, and SBA loans.
“It’s Brazil’s Time!” I still can hear the clarion call of Rick Fedrizzi, President of the U.S. Green Building Council, from his opening speech during the Green Building Conference Brasil in São Paulo last week. I was in Brazil to foster expanded commercial ties between Brazilian and American firms in the green building and energy sectors and advance the objectives of the U.S.-Brazil Strategic Energy Dialogue. For a portion of the trip, I accompanied 14 companies participating in the Department of Commerce-certified, Brazil-U.S. Business Council-organized Trade Mission. These are innovative and forward-thinking small and medium companies interested and ready to export green building products to Brazil.
Fedrizzi also pointed out that Brazil was among the top five countries for LEED certifications, so there is definitely a market opportunity for these companies. It also helps that financing is available for construction of buildings designed to LEED specifications. Brazil is rushing to get ready for the 2012 World Cup and the 2016 Olympics.
The president’s trip to Brazil earlier this year laid the groundwork for wider U.S. participation in Brazil’s rapidly growing green energy sector. I was excited to be able to participate with the companies as they are primed to take advantage of these incredible opportunities in the Brazilian market, especially the green building sector. This is a priority area for the President’s National Export Initiative, not only because it can generate new sales for American industry but also because it is a powerful way to grow green jobs in the United States. U.S. goods exports to Brazil in 2010 were $35.4 billion, up 36 percent from 2009. In 2010, Brazil was the eighth-largest export market for U.S. goods.
President Obama explained his proposal for putting creating jobs now and putting Americans back to work before Congress. In addition to giving the economy a shot in the arm with more money in the pockets of working Americans, his proposed American Jobs Act has several new ideas, backed by both Democrats AND Republicans, which are a win for businesses and employers. The President is focused on rebuilding the economy the American way, through the ingenuity and hard work of the American people.
Businesses and employers stand to win under the President’s American Jobs Act in various ways.
It offers tax relief:
- A payroll tax cut for 98 percent of small businesses
- A complete payroll tax holiday for added workers or increased wages
- Extending 100 percent capital expensing into 2012
- Reforms and regulatory reductions to help entrepreneurs and small businesses access capital