Which President Is Better For Your Small Business?
November 5, 2012
Who is going to be better for your small business, Obama or Romney? Before you cast your vote, think about where each candidate stands regarding the important issues that impact your small business.
Here are 5 things to consider before heading to the ballot box:
How will small business lending change in the next four years?
Getting a loan these days is difficult because of the economic decline in 2008. As banks have tightened their lending requirements, what will the next president do to change this system? What can small businesses expect to see in the near future? This will have a major impact on your business’s potential growth.
Obama has made efforts to support small business owners by creating numerous loan opportunities through the Small Business Administration. However, his plan to increase taxes for the rich may limit the amount of money wealthy individuals invest in their banks, which could mean banks decrease their small business lending.
Romney’s plan is heavily focused on small businesses and job growth, which implies that he will provide solutions for banks or the government to loan more money to private business owners. But he also has a plan to significantly reduce government spending, which may limit the government’s ability to offer federally-backed small business loans.
What will the government do to offset increasing medical insurance rates?
The introduction of Obamacare has caused many insurance companies to boost their rates and reduce their coverage options. As a result, small business owners are now struggling to cover the costs. Do the 2012 presidential candidates have any plans to change this? What will they do to make medical insurance more affordable for the self-employed? Without effective plans, the balance of unpaid medical bills in the country is sure to skyrocket.
Obama firmly supports his plan for healthcare, asserting that it encourages people to get the coverage they need and it boosts the economy at the same time. Fortunately, the current president has already proposed more tax cuts for small business owners, which should compensate for the money small businesses spend on insurance.
Romney is against Obamacare from all angles, and he wants to completely abolish its existence. This would free up $95 billion in government spending, but it still may not reverse the rates that have already increased in the insurance world.
Will self-employment tax change in the next four years?
We have already seen a significant drop in self-employment tax rates during the last few years, which have allowed entrepreneurs to keep more of the money they work so hard to earn. Nevertheless, the rates are still staggering, which force many self-employed individuals to charge more to offset taxes and that in turn causes large businesses to look outside of the U.S. for contractors. So what are the candidates doing about taxes with regard to small and startup businesses?
Obama has made valiant efforts to cut self-employment tax rates during his reign as president, and he plans to cut even more if he is re-elected. With this in mind, he plans to increase taxes on the rich, which could force large businesses to re-evaluate their spending.
Romney’s plan to dramatically cut back on government spending may leave room for lower tax rates on the private sector. However, he also plans to cut corporate taxes by 10%, making many question where the government will get its funding and if that’s sustainable.
What will the government do about outsourcing labor?
Many business owners outsource their work to foreign countries because they can pay less money in labor costs and taxes. The downside to this is that it limits the money flowing through the American economy, and it prevents freelancers and contractors from finding work. What will the candidates do to change this?
Obama plans to eliminate tax breaks for businesses that outsource work overseas, meaning contractors and freelancers in the U.S. should have an easier time finding work. On the flip side, those currently outsourcing overseas may have to pay more annual taxes.
Romney plans to encourage businesses to recruit workers from around the world – even proposing to raise the visa caps for highly skilled international workers – which may lead to more outsourcing.
How will government funding impact businesses in the near future?
This is perhaps the biggest question of all. What will federal spending do to improve or hinder businesses in the coming years? How will the president ensure that the money available is allocated to the right programs? To help determine your vote, you need to know how funding may impact your business.
Obama wants to invest a large portion of the federal budget into funding startup businesses. This will improve your chances of getting your business off the ground, but what about funding for non-startup businesses?
Romney wants to fund educational programs to give entrepreneurs and employees the knowledge they need to succeed. Though with his plan to shrink the federal budget, would these educational programs ever get off the ground?
At the end of the day, you have to take a thorough look at each candidate’s plan for the coming years and assess which one best matches your business goals. Once you evaluate your options, you’ll know who to vote for on Election Day.