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On Monday, John McCain visited Pennsylvania, where he attended a meeting with small-business owners to discuss jobs and the economy. While his remarks on energy earned plenty of press coverage, his comments on strengthening small businesses, and thereby promoting future economic growth, were less noted. As such, I wanted to use this post to highlight some key aspects of John McCain’s plan to help them.
Before doing so, let me say that I, and I suspect many other BlogHers, have a very personal interest in policy impacting small businesses. Having been “my own boss” prior to joining the RNC, like more and more women across the country every year, I can confidently say that increasingly, small-business issues qualify as women’s issues — and that policy on everything from taxes to health care to energy matters for small-business owners.
It’s worth noting that about 23 million small-business owners across America file tax returns under the personal income tax schedule. So, keeping income tax rates down matters if these businesses are to prosper, grow, take on more employees, and offer them better pay and benefits. That’s one reason why John McCain has pledged to keep the top rate of income tax set at 35%, and it’s also why Barack Obama’s plans to raise it back up to 39.6% are problematic. Of course, some small businesses are incorporated, and the McCain small-business plan also offers good news where they are concerned: John McCain has proposed reducing the corporate tax rate, which currently stands as the second highest in the world, to 25% from 35%. That’s a change that will have a real effect on incorporated small businesses’ ability to thrive in the current economic environment, as well as the global economy.
Other tax changes John McCain will prioritize as president include:
- establishing a permanent R&D tax credit equal to 10% of wages (to incentivize innovation and encourage entrepreneurship, especially in cutting-edge industries);
- allowing first year expensing of equipment and technology investments (to boost capital expenditures and reward investments in critical business infrastructure to the maximum degree possible); and
- making the tax system simpler, flatter and fairer, overall (John McCain favors allowing Americans to file under a system with just two rates and a generous standard deduction, as an alternative to the current system).
These are proposals that truly will help small businesses to invest and grow, which in turn will help strengthen our ailing economy — though they are by no means the only small-business solutions that John McCain is offering.
Health care is another area of concern for small-business owners, who are often hit hard by rising costs and whose employees often struggle in the current system to acquire and keep quality health insurance. Carly Fiorina offered a detailed overview last week of John McCain’s plans with regard to health care, but the simple point is that John McCain wants to make health insurance easier and more affordable to acquire as well as make it innovative and portable. This would be accomplished by allowing Americans to purchase insurance across state lines, in a national market, by giving them a tax credit of $5,000 per family, or $2,500 per individual, to purchase insurance and most of all by working aggressively to bring down actual health care costs (e.g., by increasing transparency and focusing research efforts on curing chronic disease). Implementing John McCain’s health care plan would create an environment in which it would be easier and cheaper for small businesses to offer insurance to their employees, and easier and cheaper for small-business employees to acquire it where their employer does not do so. By contrast, Barack Obama’s plan contains a mandate that employers provide insurance to their employees. That sounds great on paper, but in reality, it would mean reduced worker wages and the elimination of jobs, as employers work to balance the books while meeting new requirements. True, Obama does say he will exempt “small businesses” from this mandate, though what he defines as a “small business” remains unclear. What is not in doubt is that businesses that are indeed small, but do not precisely match Obama’s definition, would be hard hit by such mandates. That could also mean that
