Liz Updike: How Washington can help small business
With the 2012 elections now finished, it’s time that President Obama and Congress pay attention to what small business owners and entrepreneurs need and promote policies that will encourage growth on Main Street. One step the federal government needs to explore is expanding the range of eligible key investments that are exempt from capital gains taxes in small business from only C corporations to LLCs, consulting, financial services, IT, and engineering companies.
According to the Small Business Administration, since the recession has hit, the number of new small businesses started each year has decreased. With the unemployment rate as high as it is currently, the new administration and congress must focus on igniting the small business community for growth, and also give the jobless an opportunity to create their own job by starting their own business.
In many cases, this can be an opportunity to start a consulting business to leverage experience in one industry while looking for permanent employment and developing new skills in another growing industry. A great way to stimulate this type of activity is to provide tax incentives and access to capital to small business owners and entrepreneurs as they start their new businesses on Main Street.
Another idea that should be considered is allowing small business owners to deduct more in start-up expenses, such as the depreciation on necessary equipment and healthcare expenses. We don’t want to make start-up businesses and solo entrepreneurs pay both the employer and employee share of the payroll tax. We are trying to encourage and not discourage growth on Main Street.
Small business owners and entrepreneurs will eventually build their companies and will hire more people to support that growth as they grow and their revenues increase. Handicapping small business owners and entrepreneurs from the start by limiting deductions and paying taxes and regulatory penalties will not support the growth needed in this sector, especially for minority and women owned businesses.
It’s time that the administration and congress encourage growth on Main Street by promoting policies that will help spur growth and opportunity for small business owners and entrepreneurs all across this country.
Liz Updike is the CEO and founder of Liz Enterprises LLC. Online at www.lizupdike.com.