By defeating Mitt Romney, President Obama has another four years to lead the country through an economic recovery. During his campaign, Obama stressed the importance of small businesses in the American economy and vowed to limit their tax burdens to help encourage job creation. However, some business owners doubt he will live up to his promises.
One of Mitt Romney’s main speaking points was repealing Obamacare, which he said was killing small businesses. The president’s victory will allow the law to take full effect as scheduled in his second term in office. The changes included in the health care reform law are an employer mandate for businesses with 50 or more employees, and a tax credit for business owner’s contributions toward their employees’ health costs. The president also refused to extend the Bush-era tax cut for high-income earners, a sticking point with Republicans. Lifting these tax cuts will increase the tax burden on roughly 700,000 small businesses.
Obama wants to raise the tax rate on income from investments, which critics say would dissuade wealthy Americans from investing in young businesses. Another point of contention for critics is the corporate tax rate. Under a Romney administration, the tax rate would have dropped to 25 percent. Obama has only promised to go as low as 25 percent. Romney also promised to remove regulations that he said were “strangling” small business owners. With his defeat, all Obama era regulations will continue untouched including the Dodd-Frank Wall Street reform law and changes to the Sarbanes-Oxley financial reporting law.
Small business owners’ outlook on a second Obama presidency varies. Some have expressed anger and frustration and threatened to take their companies offshore. Other owners agree with his policies and feel it’s only fair and patriotic to pay higher taxes in the name of helping the American economy recover. Only time will tell if Obama’s new policies will help or harm small businesses and if a sharply divided congress will work with him to assist the true job creation engine of our economy.