Tuesday, March 12, 2013

Small Business Creates the Most Jobs and ObamaCare is Killing Them

Small businesses, defined as businesses with less than 500 employees, create nearly 70% of the jobs in this country.  Unless small business creation improves or existing small businesses expand, there will continue to be little job growth in this country.  And without job growth and increasing employment, government tax revenues will remain weak and $1 Trillion gov't deficits will persist.  Growth is the only answer to our budget predicament!

Many small businesses file as Subchapter S or LLC on their Federal tax returns and are therefore affected by highest individual marginal tax rate which was recently raised in January to satisfy Obama's fetish for higher tax on the "wealthy."

ObamaCare is Killing Small Business and Their Job Creation

But both ObamaCare and higher taxes hurt business by raising costs.  ObamaCare is essentially another giant tax on business hurting small businesses the worse.  Notice that small businesses didn't receive any of the 1000's of ObamaCare waivers that the "big boys" like McDonald's got to wiggle away of the law's costly mandates.  If you're not helping small businesses then you're not helping job creation in this country.  

Our "affirmative action" President  obviously doesn't understand this otherwise he wouldn't have been hell-bent on raising taxes on those who create jobs in January. The worse thing is that he doesn't seem to be aware how ObamaCare is killing small businesses.  How could he?  I don't think that Obama has ever had a private sector job much less any business experience!!  That Obama is ideologically blind, woefully inexperienced and/or stupid is a big series of problems for our country.  People that re-elected him are also part of the problem.

Bring Back Jobs From China and Asia and Help Small Business in This Country

ObamaCare is killing small business and jobs.  How likely is that Obama will have an epiphany about his job-killing legislation? Never!  We will never have a vibrant economy as long as Obama is President!! If Obama really cared (which he doesn't) or were smart (which he isn't) he would make small businesses exempt from the requirements of ObamaCare.  This would be the first thing to do.

Second, because high taxes are an expense to business, then it's important to lower the marginal corporate tax rate to something like 25% and include small business creators who file as LLC and Subchapter S. This helps small business.

But importantly, lower corporate tax rates will make the US top rate more competitive with international tax rates and reduce the incentive for big business to shift operations overseas.  Incentives work!  The problem is that there's been incentives for big businesses to shift operations overseas due to higher taxes in the US. This affects large companies the most, but they are the ones who have created millions of jobs overseas in response to our own disincentives.  Herein lies an opportunity to bring back large numbers of these jobs back to America!

Furthermore, China and Asian cost advantages have largely dissipated in recent years due to their own wage and cost inflation.  It's highly likely that a reduced top US corporate tax rate of 25% will bring back jobs to the US from China and Asia.   This is a nascent trend already.

Bring back jobs from Asia and help the real business creators to create more jobs at home!  This will create new jobs and increase tax revenue.  
1) Reduce corporate tax rates to include Subchapter S and LLC individuals and 
2) repeal or reduce the requirements of ObamaCare that hurt small businesses.

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