Candidates Debate the State of Main Street Business
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At last night's presidential debate in Nashville , both candidates addressed the impact of the economic crisis on business owners. Democratic Sen. Barack Obama mentioned the word "small business" eight times; Republican Sen. John McCain said it six times. Obama brought up the topic first, stating that the tight credit market is hindering entrepreneurs who need short-term loans to make payroll -- causing a snowball effect throughout the economy.
"Right now, the credit markets are frozen up and what that means, as a practical matter, is that small businesses and some large businesses just can't get loans," Obama said. "If they can't get a loan, that means that they can't make payroll. If they can't make payroll, then they may end up having to shut their doors and lay people off."
"And if you imagine just one company trying to deal with that," he said, "now imagine a million companies all across the country. So it could end up having an adverse effect on everybody, and that's why we had to take action. But we shouldn't have been there in the first place."
Later in the debate, Republican Sen. John McCain accused Obama of offering a tax plan that would weigh heavily on those very business owners. He was referring to the Democrat's plan to increase taxes on American individuals earning more than $200,000 a year, and on households taking in more than $250,000.
"Sen. Obama's secret that you don't know is that his tax increases will increase taxes on 50 percent of small business revenue," McCain said. "Small businesses across America will have to cut jobs and will have their taxes increase and won't be able to hire because of Sen. Obama's tax policies."
He added that Obama's policies will result in "mandates and fines for small businesses."
Obama defended his plan, saying it would only affect the "few percent of small businesses make more than $250,000 a year. So the vast majority of small businesses would get a tax cut under my plan."
He added that he's proposing tax credits that would allow entrepreneurs to afford insurance for their work forces.
" . . . We provide a 50 percent tax credit so that they can buy health insurance for their workers, because there are an awful lot of small businesses that I meet across America that want to do right by their workers but they just can't afford it," Obama said. "Some small-business owners, a lot of them, can't even afford health insurance for themselves."
McCain continued to attack Obama on business, accusing the senator from Illinois of proposing an insurance plan that will levy fines on entrepreneurs who refuse to insure their employees. "If you're a small business person and you don't insure your employees, Sen. Obama will fine you," McCain said. "Will fine you. That's remarkable."
Obama tried to clarify his intentions. "Small businesses are not going to have a mandate," he said.
The dueling stances toward Main Street business owners was also a contentious issue during the vice presidential debate last week, when Republican Gov. Sarah Palin also accused the Obama ticket of proposing tax hikes on "millions of small businesses." The notion, however, was largely debunked by FactCheck.org, which states that Obama's plan would leave the "overwhelming majority" of small-business owners without tax increases.