Why This Election Matters To You

McCain and Obama weigh in on health care, taxes and the economy.
Magazine Contributor
5 min read

This story appears in the October 2008 issue of Entrepreneur. Subscribe »

Taxes. Health care. Immigration. Politics. Those wacky "approved-by" commercials. Had enough already?

Even if election fatigue has set in, push it aside for a second, because while this year's election is historic, its aftermath has far-reaching implications for small-business owners. The next president of this country will make it easier or more difficult for you to afford health insurance for your employees. He'll raise, or perhaps lower, your business taxes. He will make it easier or harder to launch a new business.

Yes--the outcome of this election matters. So we quizzed both candidates and cut through all the background noise to find out exactly where they stand on the issues that affect you most.

Obama's positions at a glance
Yes: Co-sponsored the Small Business Lending and Reauthorization and Improvements Act (S. 1256) -- a bill to amend the Small Business Act to reauthorize small-business loan programs

No: Did not support Health Insurance Marketplace and Modernization Act of 2006 (S. 1955) -- believes that allowing insurers to sell across state lines would enable them to bypass existing state protections for people seeking individual coverage, particularly those with pre-existing conditions

Yes: Voted for a minimum wage increase and tax breaks for businesses on H.R. 2 in 2007

Barack Obama
Democratic presidential nominee Sen. Barack Obama says he would cut taxes for middle-class families and small-business owners as part of his proposal to jump-start the economy. He would also invest in clean energy, broadband and research to improve the business climate. What else would Obama do?

Health care: Obama proposes a new tax credit for small companies that offer what he calls quality health insurance for their employees. It would cover up to 50 percent of premiums paid on employees' behalf. He also plans a new national health exchange, through which small businesses can buy what he says will be low-cost, high-quality health-care plans. Obama opposes health savings accounts, calling them costly and inefficient.

The federal government under Obama would reimburse employer health plans for a portion of catastrophic costs they incur, reducing the volatility and price of health premiums, he says.

Taxes: Obama will focus on helping small businesses raise capital by exempting investments in these businesses from capital gains taxes. He says he'll cut taxes for corporations that create jobs in America (working with the Treasury Department and the Joint Tax Committee to hammer out specifics). He also wants to institute a $500 "Making Work Pay" tax credit ($1,000 for working families) for almost every worker in the U.S. He would freeze the estate tax at its 2009 level of $7 million per couple and index it to inflation after that, which he says would eliminate estate taxes for 99.7 percent of Americans.

SBA: Obama says he would expand the SBA's loan and microloan programs, strengthen programs serving minority-owned businesses and implement the Women-Owned Small Business Federal Contract Assistance Program, designed to give women-owned businesses greater access to federal contracts (signed by President Clinton in 2000 but never enacted). Obama wants to invest $250 million per year to increase the number and size of public-private business incubators in disadvantaged communities.

Immigration: In a point of agreement, Obama, like McCain, says we need a mandatory electronic system to verify the legal status of job applicants. He also co-sponsored the Secure America and Orderly Immigration Act.

McCain's positions at a glance
Yes: Supported Health Insurance Marketplace and Modernization Act of 2006 (S. 1955) -- believes it is designed to expand health-care access and reduce costs by creating small-business health plans

Yes: Co-sponsored the Secure America and Orderly Immigration Act (S. 1033). Later said his priority would be securing the U.S. borders before enacting this legislation

Yes: Voted for a minimum wage increase and tax breaks for businesses on H.R. 2 in 2007

John McCain
"Small businesses are the job engine of America, and I will make it easier for them to grow," says Republican presidential nominee Sen. John McCain. Though the credit markets are squeezed, McCain believes recent federal efforts to improve oversight and provide liquidity to the market should help. Here's more from McCain.

Health care: McCain proposes "unhooking" health insurance from employment by giving American families a $5,000 refundable tax credit ($2,500 for individuals) to purchase insurance they like. "If you want to keep your current coverage, you can," McCain says. "But you also have the option to investigate other policies." He supports HSAs as an innovative, consumer-focused option.

For people denied coverage because of a pre-existing condition, a McCain administration would work with states to create Guaranteed Access Plans to provide coverage, using federal money to give states an incentive to adopt these plans. But the spending would be offset by reductions in Medicare costs, according to McCain's proposal.

Taxes: McCain wants to lower the corporate business tax rate from 35 percent to 25 percent, believing that will help American companies open new plants and create more jobs in the U.S. For individual income taxes, he proposes doubling the personal exemption from $3,500 to $7,000 for every dependent. He would hold the estate tax--which he calls "one of the most unfair tax laws on the books"--to 15 percent with a $10 million exemption per couple. "When you raise taxes in a bad economy, you eliminate jobs," he says. "I'm not going to let that happen."

SBA: McCain sees the SBA as a vehicle for ensuring the voice of the small-business community informs public policy. He would continue to support the SBA's assistance to U.S. small businesses "provided that support is paired with effective oversight and is rendered in a fiscally sound fashion."

Immigration: McCain says the mandatory electronic system employers use to verify the legal status of job applicants needs improvement. He wants to see a system with tamper-proof documents that preclude employer liability for accepting fraudulent documents.

Andrea Cooper has written for Time, National Geographic Online and other major outlets.

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