The Wall Street Journal reports that the increased tax rates for individual personal income over $400,000 “could impact hundreds of thousands of small-business owners who report their company's profits as personal income.” The New York Times’ You’re the Boss Blog reports that “though advocates for small businesses were concerned that legislators might overlook their interests in the high-pressure negotiations, it turns out that their pessimism was unfounded.” And small businessman and columnist Gene Marks explains why “the fiscal cliff resolution may or may not be good for my small business--but it's a very, very good thing for puppies.”
Here’s a roundup showing which small business advocates say the deal is good, bad, or a little of both for small business.
Bad: National Small Business Association President Todd McCracken: “Although supportive of several tax provisions included in the overall package, NSBA is disappointed that lawmakers walked away from a major opportunity to show the ability to work together reasonably and move toward meaningful solutions to the very serious financial issues facing the country. … Economic uncertainty has been one of the most significant challenges facing America’s small-business owners for the last four years, and Congress has done little to fix that problem."
Bad: Small Business and Entrepreneurship Council, President & CEO Karen Kerrigan: “The fiscal cliff debacle is the most recent display of poor leadership. This political ‘contest’ produced no winner. Yes, in the end, a deal was struck, but the pull back in business activity in the months leading up to December 31 is tragic – for the economy and those looking for work. If Washington continues unruly and last-hour policymaking, the U.S. economy and entrepreneurship will continue to suffer.”
So-so: National Federation of Independent Business, President and CEO Dan Danner: “It’s hugely disappointing to the small-business community that the legislative bridge to avert the ‘cliff’ did not address our country’s most pressing economic issue: unchecked spending that leads to crushing deficits and debt. Small-business owners need to balance their books to stay in business and they think the federal government should do the same – no more excuses. That said, there were some positives for small business on a few of the specifics in this deal. A substantial majority of small firms will be permanently spared a tax increase on their income and their estates, and certainty on the individual rates will help small-business owners with planning and cash flow. The mystery of what their tax rates will be is finally over, and there is relief in that, but there is much more work to be done to address spending and out-of-control deficits.”
Good: Small Business Majority, Founder & CEO John Arensmeyer: “We appreciate the president’s strong stand in support of this policy [to let tax cuts expire for the wealthiest 2 percent], but we accept the need to reach a compromise at a higher income level in order to get a deal and avert a fiscal crisis…. We also are pleased with the agreement to permanently fix the Alternative Minimum Tax and maintain other tax provisions that will keep more money in middle class taxpayers’ pockets. And, we are pleased to see that the agreement maintains renewable energy incentives, the R & E tax credit and other business tax incentives, including Section 179 depreciation, while staving off draconian across-the-board spending cuts. … But, we are disappointed that a key policy that small business owners strongly supported—the extension of the temporary payroll tax cut—was not included in the final agreement.”