How the Jobs Act affects small businesses
The battle lines were drawn and the Small Business Jobs Act was passed into law on September 27, 2010 by President Obama. Republicans and Democrats alike want to change the state of the economy in America; they simply have different ways of doing it and different principals regarding how the country should be run. Regardless of their personal preferences, jobs need to be created and American citizens need to get back to work.
Jobs Act provisions
Comparatively speaking, the Jobs Act will provide tax cuts and promote loan opportunities for small businesses. According to Allston + Bird Financial Services and Products Advisory, “The Fund is located within, and administered by, the Treasury. It is funded with $30 billion transferred to it from the Troubled Asset Relief Program (TARP).” The Jobs Act includes the following incentives to enable entrepreneurs to create more jobs:
- $12 billion in tax cuts
- Easier access to private capital
- Investment incentives
- Higher loan limits
- Health insurance affordability deductions
- Increase international export capability
- 100 percent exclusion for small business owners from Capital Gains Tax
These funds increase the ability for private business owners to gain capital and appreciate tax breaks and financial incentives that will make it easier to grow their small businesses, possibly even making it easier for them to hire new employees. However, they don’t contribute to the overall success and development of small business largely impacted by spending trends from outside forces, namely business to business and consumers.
Opposition to the Small Business Jobs Act
Given the current state of the economy, having available funding to start a business is only one small part of the equation. Once an entrepreneur begins to invest in a new business opportunity, he needs to be able to support that investment with product, services and customers. This ability has to maintain long-term viability (at least 3-5 years) for optimum chances at success. With the housing crisis still looming, unemployment rates stagnant and uncertain, the Jobs Act may well increase savings opportunities for American entrepreneurs, but that doesn’t mean those savings will be transformed into jobs for people out of work. Concerns pertaining to the Small Business Jobs Act include:
- IRS tiered penalties for failure to file tax returns in a timely manner
- Added debt to the overall economy
- Uncertain bank loan practices as exhibited in the housing crisis
- Excessive government control over small business ownership
- Tax incentives are short term
- IRS tax levies
In theory, the Small Business Jobs Act appears to assist entrepreneurs and small business owners, thus increasing the probability of job growth through variable tax incentives and loan opportunities. Signed into law only recently, success (and/or failure) of the bill remains undetermined. As many of the tax incentives expire by the end of 2010, Congress will need to address small business job growth again, either by extending tax incentive deadlines or creating new legislation to effectively promote small businesses and their ability to hire new workers going forward.
As a rule, many laws go through a series of changes from the time they are introduced, and even after they are signed by the president and fully enacted. Amendments and appeals continuously alter the dynamics of any given law, as legislators respond to the will of the people. The Jobs Act will in all likelihood be subjected to detailed scrutiny and amended as necessary to address the common good and employment necessities of American citizens.
