It is becoming readily apparent to me that this current administration just doesn’t understand what drives jobs in our economy. Hint: it isn’t government, it is small business. You see, if the Obama Administration, or even the US Congress for that matter understood this, and also cared, then they’d not be so hasty in adding new regulations, and removing the tax credits and deductions which have actually helped from the government side of things. Okay so let’s talk shall we?
There was a rather troubling article in the LA Times recently on December 27, 2011 titled; “New year will bring new laws and regulations for small business,” By Cyndia Zwahlen, which stated in the headline; “Nationwide, tax deductions for equipment purchases will be sharply reduced.” The article went on to advise the readers that;
“As of January, there will be a major decrease in how much of the total cost of new equipment – including items such as computers, machinery and vehicles – a business can deduct upfront on its tax return. That deduction, which had been boosted by federal stimulus bills, will drop to $125,000 from $500,000. And unless there is a change in the law, the deduction will drop further to $25,000 in 2013.”
Now then, taking away incentives to get businesses to expand their operations surely will not cause small businesses to grow and hire any more folks. It also means that new equipment will not be bought, therefore not be sold, made, and the company that makes it, well, they won’t be hiring anyone either now will they? Hint: Answer is NO.
Okay so, maybe you see the problem here, and it’s not my sole intention to bash the Obama Administration, as much as I truly believe they deserve it at this point for the mismanagement of our economy – but why they are shooting themselves in the foot in an election year is beyond me. Even if maybe that’s a good thing judging by their previous performance.
As a former franchisor, I can tell you that those sorts of deductions and tax credits greatly helped our new franchisees, just as they have always helped business start-ups and expanding businesses. Next, I’d say that the “occupy protests” are far too quick to throw anyone who has become wealthy in business under the bus, as the evil 1%. In doing so, it shows greed of the “occupy the parks” crowd in their demand for re-distribution, and a complete misunderstanding of where the majority of the jobs come from in this great nation; and yes it is a great nation.