I usually don’t read the USA today, but I happened to have a chance to read an article recently ( about Hillary Clinton’s plan to be the President for small business owners. I was intrigued by the article to see what real change might be coming and as an entrepreneur of many businesses I quickly realized that the proposal was something that only the Stay Puff Marshmallow business person would actually gain any benefit from currently. Here are the points from the article and then I’ll share on each point my insights on what meaningful proposals could really truly help small business owners do better. BTW, I haven’t really seen any proposal from Trump yet at all but I do know what I hear from local owners every week
Hillary Proposed Problem: Citing licensing and other burdens, Clinton’s campaign says it takes longer to start a business in the U.S. than in countries such as Canada or Denmark. I laughed at this one because you can start a business out of your house anytime you want. In fact, even getting an LLC set up and getting a basic business going would only take a few days. It would be great to see what industries she is talking about and what “other burdens” are when it comes to opening a business. How about this for a solution. Allow people to borrow money or take money from their retirement plans to start a business and either have a zero rate interest loan from themselves or no IRS penalty/taxes if they use the money to start a business.
Hillary Proposed Problem: Improve access to financing. In 2012, small-business loans made up 29% of all bank loans, down from 51% in 1995, according to the Clinton campaign. She plans to streamline regulations for community banks and credit unions that face a thicket of new rules as part of the Dodd-Frank financial overhaul. Has Hillary been to a bank of as of late to get a loan? You can even defer student debt payments, so what? The main issue is that a) the bank makes you personally guarantee everything today- making that go away would be good and b) with the SBA there are so many hoops, etc., trying to get a simple start up loan for a small business is extremely difficult. What you need is a small loan easy to get start up program.
Hillary Proposed Problem. Simplify tax filing. A new standard deduction similar to what’s available for individual filers would eliminate the need to track transportation, computer and other office expenses. About 4 million small businesses with less than $1 million in gross revenue would be able to file even more simply. Business don’t want the standard deduction. In fact, those very expenses are where most business play in the gray zone. It will actually hurt them. How about this for a real tax proposal. Offer a small business owner that puts in more than $100,000 of their own capital into their business an ability to sell the business at a 0% or 10% capital gains tax if they sell the business within seven years.
Hillary Proposed Problem. Simplify and expand a health care tax credit. The credit, which is part of the Affordable Care Act, would be broadened to more employers, including those with fewer than 50 employees — which are not required to provide coverage under the law. This credit is such a joke. It is near impossible to actually get the credit and most decent running small business get no benefit from this at all. Make the credit much easier to get in the first five years of running the business because small business owners are experiencing ridiculous price increases on health insurance. Offer a real 25% to 35% credit on health insurance premiums for all employees including owners in the first five years of running a small business.
Hillary Proposed Problem. Make it easier to do business with the federal government. She says she’ll improve online services and guarantee a 24-hour response to businesses with questions about regulations and access to capital, among other ideas. Ok, this is so silly I can even make comment. Has Hillary ever talked to a business owner that had to deal with the IRS alone?
This kind of rhetoric is not what small business owners want to hear. If you really talk to a small business owner, we never really feel the Government rewards us for the risk we take to create all of these jobs. In fact, if you do well as a business owner you get to be taxed twice. Taxed on all of the profit you earn and then taxed again when you sell your business. With Hillary’s new capital gains taxes, you will get to pay even more money on your earned income and even more when you sell it. The only change small business owners can prepare for in the future is more of the same…no change.
Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO ofoXYGen Financial. You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.
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