Obama plans to give small business a boost
Small businesses will get some continued tax breaks under the proposed budget that President Obama is planning to submit this month, the White House said. Also unveiled was a private-public initiative, led by AOL co-founder Steve Case, to help find funding for and otherwise support small business.
“Entrepreneurs embody the promise of America: the belief that if you have a good idea and are willing to work hard and see it through, you can succeed in this country,” Obama said in a statement. “And in fulfilling this promise, entrepreneurs also play a critical role in expanding our economy and creating jobs.”
The White House said Monday that its budget proposal would include the recommendation that a temporary tax cut for those who invest in small businesses be made permanent. Investors who put money into small businesses and hold on to the investments for at least five years would get a break in capital gains taxes after they sell.
The Case-led initiative, called the Startup America Partnership, has already begun bringing in large companies to help smaller ones through investments, education and mentoring. It also aims to help scientists develop products based on knowledge gained from federally funded research.
“America’s story has been forged in large part by entrepreneurs who have against great odds created innovative products and services that have changed the world — and created millions of jobs,” Case said.
The partnership, which does not need congressional approval, has received commitments of $200 million from Intel Capital, the investment arm of chip maker Intel Corp., for new investments in U.S. companies; $150 million from IBM Corp. for programs that promote entrepreneurship in the U.S.; and $4 million from Hewlett-Packard Co.
Facebook Inc. has signed on to hold up to 15 “start-up days” around the country to give business owners access to experts who can help them.
The partnership will also receive funding from the Case Foundation and the Ewing Marion Kauffman Foundation. Carl Schramm, chief executive of the Kauffman Foundation, will serve on its board.
Another set of programs, to be run by the U.S. Small Business Administration, will provide $2 billion in government-backed investment directly to small businesses. About half the money will be used to fund green start-ups and those owned by women, minorities, veterans and others that the federal government defines as underserved. The rest will be invested in existing businesses that are poised to grow but need funding to do so.
Gary Toebben, president of the Los Angeles Area Chamber of Commerce, welcomed the efforts aimed at small businesses.
“I’m pleased that the president is talking about business growth and the creation of jobs,” Toebben said.
But he cautioned that small businesses are essentially local — so federal action may not be enough.
“The president might say to every state and local government, ‘You can help too,’” Toebben said. “Because there’s only so much the feds can do.”
