Government and the Little Guy
Governing bodies have a reputation of not only forgetting about the little people, but often stepping on them when they are down.
Even before he was elected, President Obama, a self-proclaimed voice for change, has recognized that small businesses are the financial backbone of the economy and, as such, must be nurtured and maintained.
In his short time in office, some moves have been made to help small businesses, including the passing of a stimulus package in February. The plan provided the U.S. Small Business Administration (SBA) with program tools that offered new economic incentives to small businesses. These incentives are aimed at growing the economy through job creation, restarting lending and investing in small businesses. The package contains loan-fee reductions, higher guarantees, secondary market incentives and new and enhanced SBA programs that aim to help unlock credit markets and begin economic recovery for the nation’s small business sector.
Small business advocates said some of what has come down under the administration is beneficial, but things on the horizon may actually work against the little guys.
“I believe they will hurt small businesses more because of the tax increases and regulatory proposals [being floated during the past few weeks],” said Karen Kerrigan, president and chief executive officer for the Oakton, Virginia-based nonprofit, advocacy group Small Business & Entrepreneurship Council. “Obviously, the current economic situation compounds the impact of his policies because they impose more costs on business. That is why we are trying to get the message through that raising taxes now is not smart economics.”
However, taking care of small businesses is definitely an intelligent idea. Small businesses, which the SBA defines as an independent business having fewer than 500 employees, are pretty important to the nation’s financial health. According to the SBA’s Office of Advocacy, small businesses have created 60 percent to 80 percent of the net new job since the mid-1990s. And, the U.S. Department of Commerce, Bureau of Statistics noted that small firms employ about half of U.S. workers.