White House Chronicle

News Analysis With a Sense of Humor

  • Home
  • King’s Commentaries
  • Random Features
  • Photos
  • Public Speaker
  • WHC Episodes
  • About WHC
  • Carrying Stations
  • ME/CFS Alert
  • Contact Us

If only Tax Credits Were Answer for Small Firms

January 28, 2010 by White House Chronicle 1 Comment

The shutters are coming down at hundreds of thousands of small businesses, grossing between $1 million and $10 million. For them the question that hangs in the air, if not spoken, is: How much did we take today?

It’s the eternal question that haunts small business. Whether it is daily, weekly or monthly, the same brutal calculation has to be made: Was more money booked than committed?

Politicians, and certainly President Barack Obama, gathering from what he said in his State of the Union address, know that they need the support of myriad small businesses.

They need the husband and wife who drive an 18-wheeler across the country and the baker who rises at 4 a.m. to make doughnuts for city office workers. They need the suburban bicycle repair shop, the ethnic restaurant in the rundown strip mall and the Web design firm in a city loft.

These are real entrepreneurs who start businesses from dreams, not from textbooks in business schools.

Politicians know America needs the entrepreneurial class. But they are morbidly disinterested in the real needs of this class. They demonstrate this in their only answer to the question of helping small business people: tax credits. In the 33 years I operated a small publishing company, only one year were taxes close to being a problem.

The problems for small businesses, whether making gadgets for Wal-Mart, running a salon or operating a travel agency, are the same: Banks think you are a nuisance and are loath to lend you money, or even take the time to understand your business.

Banks’ lending criteria are created by MBAs in marble towers, far from the street below. That’s why so many businesses have been launched on credit cards with previously established credit. It’s risky and expensive, but it happens all the time.

Then, there’s the problem of providing health care for employees. It’s punitively expensive if you provide it, and you feel morally at fault if you don’t.

Corporations — all corporations — are inclined to seek monopoly. Therefore, they squeeze small companies, whether it’s Target pressuring the local toy shop or Borders putting the old neighborhood bookshop out of business. They close those lines of endeavor to countless people.

For every chain restaurant, count one family restaurant that didn’t open. The family-run hotels and motels that dotted U.S. highways are gone. Things of the past.

Congress’s normal response, and one given by the President, is to give tax breaks to small businesses. Most small businesses would be glad to do well enough to pay taxes.

Once, there were many small business people in Congress. Now, there are few. The last congressman I knew who knew something about small business was Rep. Chet Holifield, D-Calif. Powerful and hardworking, he chaired the House Government Operations Committee. He also operated a haberdashery in California. Are there many haberdashers left in the age of Banana Republic?

The Small Business Administration underwrites loans for small business, but it is a slow business. I knew a printer who qualified for assistance, but he was out of business by the time the agency agreed to help. Government is not nimble enough to help the person who can’t make payroll next Friday.

Obama should stop further complicating the tax code, which is a burden to small business. Instead, he should put together a brain trust on revitalizing small business. Forcing the banks to lend to small business is a good first step. The main problem for small business isn’t taxes, it’s credit.  –For the Hearst-New York Times Syndicate

Email, RSS Follow
Email

Filed Under: King's Commentaries Tagged With: banks, President Obama, small business, Small Business Administration, State of the Union, tax credits

Comments

  1. Joan says

    February 1, 2010 at 2:23 pm

    As usual, spot on! Let’s hope the good folks at the SBA take it to heart.

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

White House Chronicle on Social

  • Facebook
  • Twitter
  • Vimeo
  • YouTube
Many Newspapers Are on Death Row; Will They Be Reprieved?

Many Newspapers Are on Death Row; Will They Be Reprieved?

Llewellyn King

Newspapers are on death row. The once great provincial newspapers of this country, indeed of many countries, often look like pamphlets. Others have already been executed by the market. The cause is simple enough: Disrupting technology in the form of the internet has lured away most of their advertising revenue. To make up the shortfall, […]

Fighting Wildfire With Fire, Lessons From Georgia and Florida

Fighting Wildfire With Fire, Lessons From Georgia and Florida

Llewellyn King

Did the fire at the end of Walt Disney’s iconic animated movie “Bambi” prejudice the country against forest management with controlled burning? Maybe so. The U.S. Energy Association in February presented a virtual media briefing on the fire threat in the West and the Southwest this year. The prognosis, especially from the weather forecasting company […]

Dark Clouds on the Horizon for Electric Vehicle Batteries

Dark Clouds on the Horizon for Electric Vehicle Batteries

Llewellyn King

The move to renewable energy sources and electrified transportation constitutes a megatrend, a global seismic shift in energy production, storage and consumption. But there are dark clouds forming, clouds reminiscent of another time. The United States has handed over the supply chain for this future to offshore suppliers of the critical materials used in the […]

The Threat of Nuclear War and the License It Has Given Putin

The Threat of Nuclear War and the License It Has Given Putin

Llewellyn King

History isn’t short of people to blame. You could say of the present world crisis that it was former president Barack Obama’s fault for not getting tougher with Russian president Vladimir Putin in Syria. You could blame former president Donald Trump for giving Putin a sense of entitlement and for undermining NATO, seeing it as […]

Copyright © 2022 · White House Chronicle Theme on Genesis Framework · WordPress · Log in