Debate 1: Obama, Romney Spar Over How to Tax Small Business
In case you were too busy running your business last night to tune into the first presidential debate in Denver, here’s a recap: Both candidates talked about their support for cutting taxes for small businesses in some way, but they sparred over what is actually considered a small business.
Overwhelmingly -- from polls to political pundits to the Twitterati -- former Massachusetts Gov. Mitt Romney was considered the winner of the debate. In the first few minutes, Romney recounted a five-step plan he has for creating jobs that he previously outlined at the Republican National Convention. One of the five key components to his plan is to "champion small business."
"It's small business that creates the jobs in America. And over the last four years small-business people have decided that America may not be the place to open a new business, because new business startups are down to a 30-year low," Romney said. "I know what it takes to get small business growing again, to hire people."
President Barack Obama acknowledged that he and Romney "do share a deep interest in encouraging small-business growth" and he touted that he has cut taxes for small businesses 18 times throughout his four years as president. He pledged to continue cutting tax rates for small businesses, and families.
While both candidates agreed that they want to decrease taxes for small businesses, the two presidential candidates clashed over what defines a small business.
Romney said one critical way to lower taxes for small businesses is by lowering the individual tax rates. He wants to extend the Bush-era tax cuts for everyone, which he says will also help small-business owners. "Fifty-four percent of America's workers work in businesses that are taxed not at the corporate tax rate but at the individual tax rate. And if we lower that rate, they will be able to hire more people," Romney said. "For me, this is about jobs."
Obama countered that under his plan to eliminate the Bush-era tax cuts for anyone who makes more than $250,000, 97 percent of small-business owners would not see their income taxes go up. "Under Governor Romney's definition, there are a whole bunch of millionaires and billionaires who are small businesses. Donald Trump is a small business," Obama said.
Romney argued that business owners in the top 3 percent do the lion's share of the hiring and growing. He cited an electrician he talked to in St. Louis who has four employees. "He said he and his son calculated how much they pay in taxes. Federal income tax, federal payroll tax, state income tax, state sales tax, state property tax, gasoline tax — it added up to well over 50 percent of what they earned," Romney said.
Meanwhile, Romney cited a report from the National Federation of Independent Business that says raising individual taxes on that portion of business owners could cost approximately 700,000 jobs. Recently, the NFIB has come under fire for allegedly supporting big business and right-leaning causes.
The candidates also wrangled over health care. Romney said "Obamacare" makes businesses less likely to hire people, while Obama noted that the model has worked in Massachusetts, where Romney created it as governor, and it hasn't hurt jobs.
Throughout the debate, Obama and Romney sprinkled their commentary chock full of numbers and statistics, all of which the policy-hungry media ate up, but which may have largely left the American view public glassy-eyed. As a result, the one-off comments that the candidates made -- "zingers" as the Twitterati called them -- were the most popular part of the debate for many.
One highlight came when Romney told the moderator, Jim Lehrer, the executive editor of the NewsHour on PBS, that he would consider chopping federal funding for PBS in his efforts to tackle the federal deficit. "I like PBS. I love Big Bird. I actually like you too. But I'm not going to -- I'm not going to keep on spending money on things to borrow money from China to pay for it," Romney said.
By the end of the debate, there was already a twitter handle "@BigBirdRomney" with more than 7,000 followers that proclaimed "I just got fired by Romney."
The next debate of the campaign is scheduled for Oct. 11, on foreign and domestic policy between the vice-presidential candidates of the two parties, Vice President Joseph Biden and Rep. Paul Ryan (R., Wis.).
Did the first presidential debate change your mind about which candidate will be the best for entrepreneurship? Leave a comment below and let us know.
Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.