Obama proposes a slew of measures for small businesses
Obama proposes a slew of measures for small businessesNew Delhi, Apr 12 (KNN) Small businesses that hired new workers or gave salary hikes to their workers in the US, last year, are likely to be given a 10 per cent tax credit, according to a media report.
A proposal to this effect figured in US President Barack Obama’s USD 3.8 trillion budget plan that was released recently.
For the fiscal year that begins October-1, the President’s budget message also contained proposals that would streamline the application process for Small Business Administration (SBA) loans and increase the number of lenders working with the small scale sector.
Significantly, the tax credit is an incentive to small businesses to hire and raise employees' pay. It applies to companies that paid less than USD 20 million in wages in 2012.
Those eligible could get a one-time credit of 10 per cent for the amount paid to new workers and in raises to current workers. However, there would be a limit of USD 5 million on the credit.
Obama’s budget proposal has allocated USD 810 million for SBA, a drop of USD 109 million, or 12 per cent from the 2012 budget. Nevertheless, Obama's proposal has also repeated a suggestion he had made in the past, to include the small businesses in a consolidation of agencies and programs that promote business and trade.
In his State of the Union address in February, the President proposed the raise of the federal minimum wage from the current USD 7.25 to USD 9. This was reiterated in the budget speech, though it had received considerable criticism by small businesses who said they could not afford to pay their workers more.
Other proposals that would have an impact on small business were – waiver of fees for loans under USD 150,000; extension of refinancing loans provision up to September 30, 2014; increase in number of lenders; small business credit initiative; increase in number of government contracts with small businesses; and starting a network of 15 manufacturing innovation institutes across the country.
The media has stated that the budget got mixed reviews from small business advocacy groups. One group pointed out - the minimum wage proposals would limit the number of jobs created by small businesses; unskilled workers would not be able to break into the job market and owners would not be able to create new positions for them; it would not lower the federal deficit.
On the other hand, another group said it was pleased with Obama's proposal to give small businesses a tax credit for hiring employees and giving raises, and with its manufacturing initiatives.
It would give small businesses economic opportunities and help them create jobs, it said. (KNN)