Big Ideas, Small Businesses
By: Allie Bailey (A3)
Since small businesses are vital to the economy of the United States, if there is an increase in the protection for small businesses then it will lead to more job opportunities, to economic growth and innovation, and to more money paid to local governments in order to help finance better roads, schools, and parks.
What is a small business?
There are three types of small businesses:
- Sole Proprietorship- has one owner ex: Cocoa Blue in Rochester, Illinois
- Partnerships- two or more people share an agreement and work together in that business ex: Skintastic! in Springfield, Illinois
- Corporations- a formal structure where the owners are usually officers of the corporation and get paid a salary ex: the Springfield Old Navy
Why do small businesses need to continue to be protected?
1. They provide job opportunities.
- In 2011, 14.3 million jobs of the 22.9 million in the United States were from small businesses.
- Many small businesses provide job opportunities to people who may not be employable for a larger business.
- The benefits of having a small business extrapolates outwards.
- Large businesses depend on small buisnesses for the completion of various business functions through outsourcing.
2. They provide economic growth and innovation.
- Ben and Jerry's - This company first started selling their ice cream in a gas station with only a $12,000 investment. They used a signel five-gallon ice cream maker to churn out batch after batch of ice cream.
- Nike - This company was originally known as Blue Ribbon Shorts and started selling their shoes out of a van at University of Oregon's track meets.
- Microsoft- This company started small as they made hand-assembled computers out of a garage.
Small businesses can lead to big buisnesses and ideas because they usually attract talent that invent new products or implement new solutions for existing ideas. Also since they are so small, they can make and implement changes quicker as opposed to companies like Target. Think of all the word changing ideas people could be missing out on if they don't protect small businesses!
3. They pay money to local governments to help finance local communities.
A thriving small business will generate high sources of revenue. When there is high sources of revenue, there are also more taxes paid. Some of this tax money can be used to finance public roads, sidewalks and parks. Basically, when someone chooses to shop locally, they are choosing to give back to their community.
How have small businesses been protected thus far?
- He has enacted 18 different tax cuts, one of which includes the elimination of taxes on capital gains on key investments.
- Healthcare- Now with the Affordable Care Act, businesses with fewer than 25 employees that provide health insurance with the Small Business Health Options Program can now qualify for a tax credit of up to 50% off to offset the cost of insurance.
- He has sped up payments to suppliers.
- He has increased contracting transparency.
- He has made government programs and resources readily available.
What are some ways we can protect small businesses?
- More Federal Spending- President Obama has asked congress to authorize $56 million in stimulus spending. This money would be used to help expand early education programs, repair roads, and finance new transit projects across the country. If congress chooses to pass that, then some small businesses would even have an increase of employment.
- Lowering the Tax Rate For Some Companies- This budget would eliminate loopholes that are commonly exploited by hedge funds and private equity groups, and it would seek to put an end to certain tax evasion tactics used by corporations that store profits overseas. Basically, he would put an end to loopholes that tend to favor big businesses.
- Having More Money for Consumers- you do not want to cut entitlement programs. If policymakers decide to not cut back on entitlement programs, there would be more money in the pockets of many low-income and Elderly Americans which could then be spent at small, local businesses
- Expanding the the earned income tax credit for low-wage workers who do not have children- This expansion would allow them to keep a larger part of their paychecks each month. This would allow more money to be spent at small businesses, also.
“Never underestimate their [small business’] power; small business owners are entrepreneurs and innovators, and, most importantly, support the vitality of our communities”- Jack Kleinhanz, the chief economist for the National Retail Federation