President Obama and Mitt Romney have consistently made small business a big part of the presidential campaign. Both have argued that their policies would foster entrepreneurship and both have relentlessly attacked their opponent for making life more difficult for companies on Main Street.
Courting the small business vote could prove especially important this election season, as roughly half of the country’s private-sector workers are now employed by a small business, giving a large portion of the electorate a vested interest in supporting whichever candidate supports the nation’s smallest firms.
So who is that candidate? Small business owners haven’t reached a consensus. Romney held a significant lead in the most recent survey of small business owners, while several similar polls have given the edge to Obama.
But the political issues that impact small businesses are much more clearly defined. Several studies have shown that entrepreneurs are particularly concerned about burdensome regulations, unstable tax rates and health care costs — but that’s only the beginning. Here, we break down where Obama and Romney stand on the most critical issues for entrepreneurs and small business owners heading into the election.
The presidential candidates and their running mates have emphasized stark differences in their tax plans, particularly concerning the expiration of the Bush-era tax cuts and the “fiscal cliff.” The president supports extending the current tax cuts for the middle class but allowing them to expire for families earning upwards of $250,000 a year. Romney wants to extend the breaks for all Americans, and one of his key arguments centers on the detrimental effects raising the top tax rates could have on small business hiring.
His campaign points to research suggesting that roughly one million small firms would see their rates increase under the president’s proposal, potentially costing the economy more than 700,000 jobs. Obama’s camp has repeatedly fired back that those one million firms account for only 3 percent of all small businesses and that many of them are hedge funds and law firms that don’t necessarily need relief.
Meanwhile, the president says he has already cut taxes for small businesses 18 times, though many were extensions of previous breaks and most have already expired. Obama has also proposed extending payroll tax cuts, which would help many small business owners who pay both employee and employer payroll taxes.
Romney hopes to pursue more comprehensive tax reform. He has pledged to lower individual tax rates by 20 percent and cut the corporate rate from 35 percent to 25 percent by closing oft-exploited tax loopholes, though he has remained tight-lipped on exactly which loopholes.
On health care
The National Federation of Independent Business has listed health care costs as the top concern for small business owners every year for more than three decades, and the cloud of uncertainty hanging over the new health care law has done nothing to move the needle. On one side, the president has repeatedly reassured business owners that they come out ahead under the law, which will eventually create small business health care exchanges that the administration says will provide more affordable options to small employers.