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Small businesses misrepresented? Need to know Friday

Posted by Jason Keith  April 20, 2012 09:00 AM

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Because this is an election year, it seems that small businesses are being talked about more and more. Small businesses as a whole are a very easy, convenient and simple group for campaigning politicians to talk about. For the most part, doing something to help the group is bipartisan, and likely to be embraced by everyone. No one wants to see their local small businesses fail, after all. They're the lifeblood of any local community. This week's roundup focuses on the new tax cut aimed at the small business market, but more importantly, whether or not it's likely going to affect ACTUAL small businesses. Another story examines how local post offices closing could negatively impact local small businesses.

Small business tax cut clears House:

Not surprisingly, the Republican controlled House of Representatives passed a $46 billion tax cut that would be designed to encourage economic growth by "providing relief to struggling small-business owners." Led by House Majority Leader Eric Cantor (R-Va.), the tax break would allow companies with less than 500 employees to take a tax deduction of 20 percent of their business income.

Majority of Small Businesses don't "fit the profile":

In this story by Tamara Keith (no relation), she examines how the proposed tax break would affect the majority of small businesses, which have far less than the 500 employees as defined by the Small Business Administration. For Seattle small-business owner Makini Howell, the the bill wouldn't help at all, according to the piece. It might end up being a few hundred dollars in savings, which certainly isn't enough to hire employees or meaningfully expand her business. So while the legislation sounds good on paper, in the real world it will do little to help the 20 million plus sole proprietors in the U.S.

Do Small Businesses Create Jobs?:

Another good question, again related to the small business legislation, is asked by Bruce Bartlett in the New York Times. In the story he outlines Congress' interest in the small business market as a potential job creating engine, but how a new study from the Bureau of Labor Statistics found that over the last 10 years new companies have tended to be smaller and stay smaller than those in the past. That same report found that the number of new establishments has fallen sharply since 2006. Bartlett contends that at the end of the day, "across-the-board tax cut for every small business, defined only in terms of employment, is nothing but an election-year giveaway unlikely to create any jobs whatsoever."

USPS closings could impact small business owners:

Few government agencies have been under more scrutiny over the past decade than the US Postal Service, which barring Congress stepping in, will close 250 locations on May 15. Many small businesses rely heavily on the local post office to do business, including to ship and receive packages, supplies and bills. With limited services in certain areas, it could hamper their day to day operations and ultimately make it harder to succeed.

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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