President Barack Obama's 2013 budget proposal, released today, follows through on some of the promises he made in his State of the Union address last month to help small businesses create more jobs, and reduce barriers to manufacturing in the U.S.
The proposed budget also calls for raising hundreds of billions of dollars from U.S.-based global companies, while ending cherished deductions and tax breaks for oil companies and other big firms.
Resembling previous proposals from the White House, the latest plan renews Obama's focus on raising taxes on the wealthy and reining in corporate tax avoidance.
"Small business owners struggled through a recession we didn't cause, yet we still lead the economy in job creation, said Frank Knapp, President and CEO of the South Carolina Small Business Chamber of Commerce and Vice Chair of the American Sustainable Business Council.
“So it's good to see the President propose steps that small business owners know will really jumpstart the economy — investing in infrastructure to create blue-collar jobs, keeping valuable service providers on the job, bringing manufacturing jobs back home and covering the cost by asking the wealthiest and big corporations to pay their fair share in taxes.”
Some of the proposals in the budget that will affect small business owners include:
• Bonus depreciation: One of few policies backed by Republicans, Obama wants to extend for one more year the 100-percent write-off of certain new capital and equipment investments for businesses of all sizes.
• New hires: Obama proposes a new 10 percent tax credit for new hiring and wage increases.
• Research and development tax credit: Makes permanent a popular provision among both parties, an up to 20 percent tax credit that companies of all sizes enjoy for research and experimentation. Cost: $109 billion.
• Corporate tax rate: Obama has agreed with much of the business community on one thing: the top 35 percent corporate tax rate is among the world's highest and should come down. The White House is expected to spell out principles for broad corporate reform, along with a lower rate, in the coming days.
• Minimum overseas profits tax: The White House said it will impose a minimum tax on overseas profits, and using the revenues to help companies investing in the United States.
Not everyone agrees that this budget will help small businesses. Chairman of the House Small Business Committee, Sam Graves (R-MO), said the budget is bad for small businesses. “It further strains the economy by worsening the national debt and punishing business owners by raising their taxes,” he said in a statement. “Despite the obvious need to address our nation’s unsustainable debt and despite the President’s promise to cut the deficit in half, this budget actually increases it even more, marking the fourth straight year of deficits exceeding $1 trillion.”