The Future of Small Businesses Under Obama

President Obama recently met with small business owners to talk about the need to prevent a tax hike on small businesses before the year comes to a close. Keeping in mind the holiday shopping season is underway and that consumer spending accounts for roughly 70% of the U.S. economy, President Obama also spoke to these small business owners about the ways in which they would be affected by a tax increase on the middle class.

President Obama’s plans for the second term include investments in small businesses that encourage innovation and lead to job creation, so that hard work pays off. The President has a plan to cut taxes for businesses that decide to employ more workers or raise their wages, jumpstarting job growth among small businesses.

However, before the year comes to a close, we are dealing with a number of deadlines and Congress must take action. President Obama has been working toward compromise solutions that will keep taxes from increasing on 98% of families across the country and 97% of U.S. small businesses. This is good news for every single small business, and here are two major reasons why:

Taxes will remain low on the first $250,000 of every business owner’s income. However, if Congress does not take action, a small business owner earning $120,000, for instance, could be hit with a tax hike of as much as $4,600.

Middle-class families won’t see their taxes increase by $2,200 – dodging a blow to consumer spending which accounts for roughly 70% of our economy. With holiday season underway, both parties should work together to pass a renewal of tax cuts for the middle class, so both American families and small business owners have an additional sense of certainty at this crucial time for the economy.

The plan put forward by President Obama is focused on small businesses on Main Street, not people like Donald Trump and hedge fund managers. America’s small businesses are responsible for creating two out of every three net new jobs in the private sector – fostering economic growth in communities in every corner of the country and providing millions of Americans, both families and individuals, with a shot at achieving the American dream. Keeping taxes low for 97% of small businesses will lead to job creation.

Whether it’s the mom-and-pop stores in our local communities or the startups in the high-tech world that keep America innovative and competitive, small businesses constitute the backbone of our nation’s economy.

In President Obama’s second term, he plans to keep building on the 18 small business tax breaks he’s already signed into law, but before that can happen the administration and Congress must reach a compromise solution that prevents taxes from increasing on 97% of small businesses beginning on January 1 of next year.

The president discussed the urgency of this situation recently stating:

“Families and small businesses would, therefore, be able to enjoy some peace of mind heading into Christmas and heading into the New Year. And it would give us more time then next year to work together on a comprehensive plan to bring down our deficits, to streamline our tax system, to do it in a balanced way — including asking the wealthiest Americans to pay a little more, so that we can still invest in things like education and training, and science and research.”

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