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Will Obama's incentives help small biz?

President Barack Obama speaks about job creation and economic growth at the Brookings Institution in Washington, D.C.

TEXT OF STORY

Kai Ryssdal: Forget Wal-Mart. Forget General Electric. Forget pretty much the rest of the Fortune 500, too. Small business is where it's at if you want to get the most bang for your economic-stimulus buck. The president himself said so today.

PRESIDENT OBAMA: Over the past 15 years small businesses have created roughly 65 percent of all new jobs in America.

The real number from the Small Business Administration is 64 percent, but still close enough. The president went over to a Washington think-tank to deliver his economic speech this morning. It wasn't quite a laundry list of what the White House wants to do to get small businesses hiring again, but it was pretty close.

Capital gains tax cuts for them. Tax breaks if they hire new workers. Help with loans. All of which is nice to have, I'm sure. But is it really what small-business owners want or need? From the Marketplace Entrepreneurship Desk at Oregon Public Broadcasting, Mitchell Hartman reports.


MITCHELL HARTMAN: Some of the incentives the president proposed today, like lower-cost SBA loans, have already been in place as part of the stimulus plan.

Molly Brogan of the National Small Business Association says the loans are working well, so funding them for one more year is a good idea. But a tax break for hiring new workers?

MOLLY BROGAN: While it certainly doesn't hurt and it can help some small businesses, we have questions as to whether or not it really is going to cause people who otherwise wouldn't, to hire that next employee.

Jon Down of the University of Portland's Center for Entrepreneurship says unless your business is already doing well in this poor economy, the last thing you need is more workers on the payroll.

JON DOWN: For most small businesses, it's more a problem of how can they generate more revenues and continue to downsize on the expense side.

Some small-business advocates think temporarily tweaking the tax code to spur investment is flawed. Take the idea of a targeted, one-year capital gains cut -- say, for selling company stock.

Raymond Keating is chief economist with the Small Business & Entrepreneurship Council.

RAYMOND KEATING: The economy really needs substantive, permanent, broad-based tax relief.

And companies need cash and credit to keep their businesses running, says Molly Brogan.

BROGAN: Being able to walk into a bank and get that loan to hire that additional employee, a lot of small businesses just aren't able to do that.

And that, she says, is something this latest round of incentives won't do much to fix.

I'm Mitchell Hartman for Marketplace.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.
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One of the most important things government can do for small businesses is to reduce the burden of regulation and other costs it lays on them and their consumers. But between cap-and-trade taxes and so-called health care reform, this administration seems intent on *increasing* the burden on small business and American consumers.

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