Mr. Obama Bashes Wall Street – Promises Tax Breaks and Cash Infusion for Small Businesses
In his State of the Union Address, President Obama on Wednesday night promised an infusion of $30 billion to small businesses to help them gain access to loans.
The money will come from the $700 billion in payback from the large bank bailouts. In addition The President also is proposing to extend a $38 billion tax break to small businesses, allowing them to write off equipment and investments more quickly.
The President blamed much of the economic recession on corruption in Wall Street and in a speech that referenced letters from various small business owners from around the country, Mr. Obama reassured small businesses that the rest of the government’s recovery planned would be geared towards helping them rather than large businesses and banks.
Many small businesses have closed in the global economic crisis, and the ones left standing have found it nearly impossible to receive funding from banks. However, many skeptics, including Jim Blasingame of The Small Business Advocate Show, are claiming that banks don’t lack the money to lend to businesses, but rather businesses are not in a position to receive money. In addition, some are asking what kinds of strings are attached to the money.
The President also proposed a tax initiative for small businesses who hire new employees or raise wages. He also supported a plan that would eliminate capital gains tax on small business investment. “The idea to make hiring easier for small businesses is a good one,” the National Small Business Association said in a statement last night. “Unfortunately, when polling our members, few believe that a hiring tax credit—which would likely be temporary—would be incentive enough to take on new employees, particularly given costly benefits. In many cases, people who take advantage of this tax credit would have hired the new employee regardless.”
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