David Clendon
Obama and Greens encourage support for small business

I’m not suggesting that Barack Obama has been keeping an eye on our Green party policy, but his recent highlighting of the economic and social value of small business certainly rings some familiar bells!

Obama has just this week met with three small business owners in Seattle, Washington, and reflecting that “Small Businesses Are the Backbone of Our Economy and the Cornerstones of Our Communities”.  He is trying to get Senate support for a bill that would increase the availability of credit for small businesses, and provide tax incentives for small business job creation.

Funnily enough this comes as I am in the middle of my ‘Smart Business’ listening tour of the country; I was in Waitakere Eco-City last week, Nelson tomorrow, and Dunedin on Thursday 2nd September.

It is great to see the American leadership actively supporting the small business sector, and we will be doing our best to encourage a similar level of awareness and political support for our small business sector.

Source: http://www.whitehouse.gov/blog/2010/08/17/small-businesses-are-backbone-our-economy-and-cornerstones-our-communities

20 thoughts on “Obama and Greens encourage support for small business

  1. …and provide tax incentives for small business job creation.

    If you’ve ever heard a small business man/woman complaining about provisional tax you’ve heard of something simple(?) that could be done to help small businesses. I don’t hang around a lot of them, but I heard Rodney Hide gave a pretty popular talk on it once, so I had to find out what the hell it was!

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  2. I agree with you Stephen there – one of the problems with provisional tax is that if you get the calculations wrong (and it is pretty easy to do), then you could be liable for not only the tax bill, but also for use of money interest. It wasn’t too long ago that the use of money interest rate was around the level of interest that a credit card company charged.

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  3. It’s murdah I tell you. Calculating your the bill requires revenue/profit projections about a year in advance which is not so easy for a small, and especially new small business. Doesn’t make one to keen too keen to get in there!

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  4. Provisional Tax

    The most easily to rectify for government and biggest bane of a small business enterprise.

    How come PAYE does not apply to business?

    What is the rational by the IRD?

    Try doing budgets and calculate future earnings on limited growth scope, increasing costs and a recession with unknown financial impacts on your customers purchasing habits.

    If you get it wrong (and your customers stop buying) you are double wacked if you have paid the taxes with a bank overdraft.

    Once by bank charges and again by penalty tax from the IRD.

    StephenR is right, who wants to be a business owner. But the tradeable sector is 100% dependent upon them to provide the jobs (and the taxes the employes pay) to keep the non-tradeable sector (benificiaries and state servants) in the manner they are accustomed.

    Good on the Greens for looking into the SME sector.

    Looking forward to what they come up with and see it written in the Green New Deal policy statements.

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  5. who wants to be a business owner.

    I would guess that most people thinking of starting a business just haven’t heard of PT (and its ramifications) or else they might just steer clear!

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  6. Obama supports small business owners??????????????????????

    As a small business owner in the US i will have to say that Obama and the democrats hate small business and would like to crush every last business owner under a pile of regulation and tax.

    The Bush Tax cuts which are going to expire hit small business owners the hardest due to the fact that small business’s in the US don’t pay Corporate Tax because they are all classified as pass through entities. Essentially most small business’s next year are going to be faced with
    a massive “Corporate Tax increase which will naturally result in higher unemployment, but I forgot the Greens think that ONLY the government can create JOBS and small business is EVIL.

    The democrats health care bill adds regulatory burdens which are going to be crushing. The fact you will need to itemize and report expenses over $600 to a single vendor is going to lead to a paperwork nightmare. Even the IRS have said they can’t handle the inflow of extra 1099 forms. Let alone you will have to collect the W9 form from companies.

    Small Business’s always have a hard time getting credit they are a MAJOR risk. The idea that the government can wave its magic wand and make all that risk disappear is another left wing dream along with all your other socialist re-engineering and risk removal projects. All you do when you make credit cheap and easy for small business is pass the risk onto the tax payer and the tax payer then ends up holding the bad debt if the business fails which the vast majority of them will.

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  7. do you always tell outright lies..there..turnip..?

    http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201008171615dowjonesdjonline000356&title=obama-urges-senate-to-pass-small-business-legislation

    President Barack Obama Tuesday urged Senate Republicans to block what he said is the obstruction of legislation that would allow small businesses to tap capital and boost jobs growth.

    Speaking in Seattle as part of a cross-continental tour to raise money for the Democratic party, Obama said he wants the legislation to be the first matter of business for the Senate to consider when it returns from a summer recess in September.

    He criticized Republicans for not allowing a vote on the measure. Republicans, however, have criticized Senate Democrats for not allowing a vote on individual amendments to the legislation.

    “Unfortunately a partisan minority in the Senate has been standing in the away of giving our small-business people a simple up or down vote on this bill,” Obama said. He added, “Everyday this obstruction goes on, is another day small businesses somewhere in the country can’t get a loan or can’t get the tax cuts it needs to grow and hire.”

    The legislation includes a series of measures that would provide small businesses with access to capital…”

    or..do you just not know what is going on…?..in yr own backyard..?

    or..do you just have your ideological-blinkers on..?

    meh..!

    eh..?

    phil(whoar.co.nz)

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  8. Please post a link that shows something in my post was a lie Phil.

    I will be waiting a very very very very very long time for you to do so.

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  9. Well I can find utter ridiculousness:

    but I forgot the Greens think that ONLY the government can create JOBS and small business is EVIL.

    Anyway.

    Small Business’s always have a hard time getting credit they are a MAJOR risk. The idea that the government can wave its magic wand and make all that risk disappear is another left wing dream along with all your other socialist re-engineering and risk removal projects.

    Sounds a bit…sub-prime-ish?

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  10. (no need for a link…)

    “..Obama and the democrats hate small business and would like to crush every last business owner..”

    for starters..?

    (what’s yr ‘small-business’..?..a gun-shop..?..

    ..an emporium for peddling the absurd…?..

    ..flogging ideological-blinkers..?

    i-hate-obama buttons..?..)

    phil(whoar.co.nz)

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  11. and you coulda used a coupla more ‘verys’s there…

    eh..?

    y’know..!..for emphasis…?

    phil(whoar.co.nz)

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  12. Eh???? StephenR

    You seem to be implying that small business is not a MAJOR credit risk.

    So I take it you think that ALL small businesses succeed in the first five years and go on to make loads of money. I think you might need to check some statistics.

    For a political party to receive my acclaim as a defender of small businesses it needs to do 2 things reduce taxes and fees on the small business and also reduce the regulatory burdens as well. If the greens want the acclaim show me the policy they have which intends to do both of those. As to Obama and the democrats they have done neither, claiming they like small business because they make credit easier to get is absurd. Since easy credit is what caused the bubble to begin with, we can thank the creature from Jekyll island for that one.

    I think some people here seem to think that all we need to do to get the economy working is to make easy credit avaliable again and then the casino can get back in business.

    The fact a president seems to push easy credit as the solution to jump starting the small business economy in the US should tell everyone that the said president is probably missing a few brain cells. Of course one does need to remember that becoming a lawyer doesn’t require intelligence and neither does the skill of delivering a speech via a teleprompter.

    Which of course leads to a very good question when was the last time the US had an intelligent president.

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  13. Still waiting.

    You do know that an Opinion can’t be a lie however a fact can.

    My post only has two facts in it.

    1. The regulatory burden has been increased on small business under
    Obama thanks to the Health care bill, especially with regard to the
    1099 filing requirements.

    2. The Bush taxes expiring effect small business owners since they
    avoid Corporate taxes by filing as s-corporations. The bush tax cuts
    expiring do not raise the Corporate Tax so non-small businesses will
    not be effected however small businesses will.
    Not good for job growth when you know the business will be facing
    higher taxes next year.

    I await some evidence Phil to refute 1 & 2 above.

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  14. Eh???? StephenR

    I think my dodgy formatting might be at fault. The first para i quoted I found ridiculous, but the second I am inclined to agree with: it seems like there are parallels with the whole residential sub-prime lending business of interest rates which don’t reflect the risk, is what i was trying to say.

    Easy credit WOULD make small business easier though wouldn’t it – in isolation it sounds like it would achieve its goal, but the tradeoffs look pretty dubious.

    I note that Stephen Tindall (dubbed an ‘archangel investor’ – wahey) is investing quite a few millions in explcitly risky, small businesses these days…but hey it’s his money.

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  15. “..You do know that an Opinion can’t be a lie..”

    really..?

    no..i didn’t ‘know’ that…and i still don’t…

    quite a simple/linear/black & white world/mind you live in there…

    ..turnip..

    phil(whoar.co.nz)

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  16. Ah okay I see StephenR, however my statement is no more ridiculous than an MP touring the country at the Taxpayers expense I assume to find out what small businesses require.

    Either MP’s are dumb and naive in the “Yes Minister” mold and need to be guided via “All Knowing” Civil servants or they understand something which is inherently easy to understand.

    It really should be obvious that the only thing a government official can do in regard to small businesses is get out of the way and reduce the amount of money in the business that is being directed towards dealing with the said governments paper work and regulatory burdens, along with the taxation of profit which can’t be reinvested back into business.

    The idea that an MP would link to easy credit policies like in the US is absurd. So often the MP feels the need to control and direct the course of the economy, one only needs to look to the US for good examples including corn subsides or the ludicrous violation of the 1st and 2nd laws of thermodynamics that is ethanol fuel. Or the solar subsides, or the Nuclear subsides or the whole host of other kick backs and under the table options of handing business owners “Taxpayer” cash. Easy credit is just another example of the government trying the above approach.

    The only response of a politician is to do nothing, of course the do nothing approach is the hardest why do ALL MP’s feel like its there god given right to interfere in the economy to pick winners and losers. The solution and it most definitely doesn’t require a trip around NZ is get out of the way and leave the businesses alone to begin with.

    How about eliminate GST, since it imposes a regulatory cost on business, Governments love VAT type taxes since the regulatory cost is pushed onto the private sector note however that the cost is not removed but rather pushed. I mean just as an example everyone here would probably think its great that there exist “Private” sector jobs for software programmers in NZ writing software to handle GST. However those jobs are not “REAL” private sector jobs since they only exist to handle the bureaucracy created by the state. How many private sector jobs in NZ fall under the above nature, IE not real private sector jobs but rather outsourced government bureaucracy, nearly the entire Accounting profession in the US falls under this definition.

    Just the other day I got a letter from a “private” company telling me how if i give them some money they will send we all the Posters my NY business is required to display. I Challenge the MP and the greens how they can in all honestly label that “private” company a private company. It only exists because a politician like the Green MP made it so.

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  17. When I owned a business I would have liked finance at fair interest rates. Instead I had to mortgage my house and pretend it was for things like overseas trips to get a fair interest rate.

    Penalties for underestimating provisional tax are harsh too, considering income varied wildly each tax period. There was no way of estimating it accurately.

    Soon as you said it was for a business the rate doubled.
    And beyond the security of a mortgage only horrendous finance company rates were available.

    No wonder why people invest in land instead because that is the only thing an ordinary person can leverage at reasonable rates.

    On the normal venture capital idea for start ups. I forget the actual proportion, but it is something like 1 in 10 makes millions, 5 fail and 4 only make the money back. So if a sovereign fund loaned money to start-ups at a fair interest rate the return to NZ, from the one that makes heaps in exports, would more than compensate for the credit costs of the 5 that fail. The other 4 return the capital. Making it a good investment.

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  18. How about this too Kerry since you seem to like “Fair” prices.

    I would like to own a new BMW, shouldn’t the government set a “FAIR” price for me so I can own one. Why not stop at BMW’s, lets include every good and service in the economy.

    Why don’t we setup a government department that fixes the price of all goods, services and wages to “FAIR” prices. Also lets call the department the NRA.

    Credit is just another scarce good within the Economy Kerry and its price (Interest Rate) needs to fluctuate according to its supply. What is funny about your post is that you are complaining about “Fair” interest rates when globally interest rates have been set via government price controls at levels which are far to low. IE a true market value for credit is far higher especially when it comes to mortgage risk.

    In fact a NZ business loan or a business loan is usually a lot closer to a “REAL” market rate than mortgage interest rates.

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  19. Very aptly named turnip. In fact interest rates in NZ have been set artificially high by the RBA. So you are talking BS. I have the BMW already!

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  20. People can rag on Obama as much as they want, but he not only means well, at least he is trying. Everybody seems to think they know how to do it better, but nobody ever does, except with their mouths.

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