All across America in recent weeks, there has been media coverage about the significant challenges small-business owners face as the recession hits the single-largest sector of the U.S. economy.
Small-business owners are hunkering down, worrying about sales, cutting back on investment and growth plans, and even beginning to cut jobs.
These stories reflect anxiety in many towns, not only because small businesses are the major source of new jobs, but they're also the lifeblood of their communities. Small-business owners support local charities, community groups, youth sports, television, radio, newspapers and more.
A new Gallup poll suggests that a strong majority of Americans want Congress to pass some form of stimulus, but they have severe doubts about the measures currently being considered to boost the economy. Small-business owners feel the same way. They're nervous and frustrated.
This group, America's job creators, hear the speeches and see the stories where legislators call on small business to help right the ship during these unsteady economic times. But when it comes right down to it, the current stimulus plan just doesn't contain much to help small employers provide the spark needed to restart America's economy.
Certainly, some initiatives are a step in the right direction.
As of Feb. 11, the proposal coming out of Washington, D.C., includes an extension of increased small-business expensing for 2009, relief from the alternative minimum tax, and support for U.S. Small Business Administration loan programs. These provisions are a good start, but in the current economic climate, it's simply not enough.
Entrepreneurs need significant incentives for the investments necessary to fuel an economic recovery. These incentives must be coupled with significant short-term tax relief to help small businesses and their employees through the current economic crisis, and then build a sustained recovery in the future.
To do that, Congress needs to focus on policies that reflect what small-business owners and their employees actually need, as well as solutions that keep jobs here today and create jobs for tomorrow.
The best way to inject immediate cash into our economy would be a six-month payroll tax holiday for small-business owners and their employees. Payroll taxes are often the highest taxes paid by both groups, so this relief would provide real help.
In addition, incentives such as increased small-business expensing must be sustained and meaningful. The current expensing limits of $250,000 should apply in both 2009 and 2010. In addition, expensing should include investments in changes to business property, not just the purchase of new equipment, as is current law.
America's small businesses are on the front lines every day, the risk takers and job creators in our economy. But small businesses, like the rest of the economy, are struggling with an economic mess they didn't create.
Still, they stand ready to do their part and lead us out of this recession. With the right combination of relief and incentives, small business can and will play a major role in creating a strong and lasting economic recovery. Congress has the opportunity to act and do the right thing for small business and for America.
It's time to take the politics out of the stimulus discussion and remember the small business philosophy: There's no limit to what you can accomplish, if you don't care who gets the credit.
Dan Danner is president and CEO of the National Federation of Independent Business in Washington, D.C. He may be reached through www.nfib.com.
