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The American Jobs Act: can it succeed?

Posted by Jason Keith  September 26, 2011 06:00 AM

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No one argues that small businesses will be a major driver of growth and a key element of an economic recovery. How to spur small business creation, growth and hiring is another issue altogether. The recently announced American Jobs Act, which has been proposed by President Barack Obama, aims to enact several reforms aimed at helping small businesses grow and hire.  It seems that everyone has an opinion either in favor of the legislation or against it, as the issue has been hotly debated in Congress and on media outlets, news websites and blogs.

The question everyone has is will the proposed legislation actually help small businesses grow? Let?s first take a look at some key components of the proposal that will directly affect small business owners:

·        Cutting the payroll tax in half for 98% of businesses: This means taxes paid by businesses on their first $5 million in payroll would be cut in half.  So even if your payroll is $200,000, your payroll tax will be half of what it was prior. 

·        A complete payroll tax holiday for added workers or increased wages: this would eliminate payroll taxes for firms that increase payroll by adding new workers or increasing the wages of their current worker (the benefit is capped at the first $50 million in payroll increases).

Other reforms include extending 100% expensing into 2012 as a tax benefit, reforms and regulatory reductions to help entrepreneurs and small businesses access capital, as well as tax credits for hiring the long term unemployed.  Start-up Assistance would also give states flexibility to help long-term unemployed workers create their own jobs by starting their own small businesses. In many cases this means continuing to collect unemployment benefits while starting their own business. 

To see the entire fact sheet on the proposed legislation you can click on the link here.  As with any piece of legislation, it has to be vetted in Congress and then passed, but at the very least it?s encouraging that the focus in government is on small business growth and creation. 

The question is now for you small business owners: do you think that the components of this plan will help you grow, spur you to hire more workers or re-invest in expanding your business?  If yes how and if no, what would you suggest be added to the proposal? 

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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About this blog

Jason Keith has been working for and with small businesses in the New England area for more than 10 years, specifically small, micro businesses. Born and raised in Massachusetts and a former journalist, he provides a unique perspective on the issues facing small businesses locally and nationally.To reach him directly email jasonpkeith@gmail.com.

This is a personal blog. The opinions expressed here are the author's alone.

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