Save for Tax Clash, Veep Debate Mum on Small Business
For entrepreneurs, the most critical issue that Vice President Joe Biden and Rep. Paul Ryan (R, Wis.) debated last night may have been what is a small business and how they should be taxed.
But if you tuned into the debate hoping to get a sense of each party’s policies for entrepreneurship, you were likely disappointed. The candidates didn't talk about the challenges of running a business or innovation, and only briefly touched on the role of small businesses in the economic recovery.
Meanwhile, who "won" the debate depends on whom you ask. The major political polls were split and the commentary from the punditry and Twitterati was largely divided based on bias. While vice presidential debates are traditionally not game changers, Thursday night’s showdown put pressure on Biden to make up for the top of his ticket’s blunder last week.
Biden was aggressive and made it clear early on that he intended to call his opposition on anything that he considered unfounded. When debating foreign policy, Biden interrupted his younger counterpart, Ryan, with the memorable line: "With all due respect, that's a bunch of malarkey." Some thought Biden’s combative pace and side-long smirk hit the right note while others felt the vice president was rude. Some praised Ryan for his even-tempered, composed delivery.
Since the VP candidates get only one opportunity to debate in the national spotlight, they had to cover domestic and foreign policy issues in one night. The first time small business was mentioned was when Ryan recounted Romney’s five-point plan to create jobs, previously outlined in Romney’s Republican National Convention speech. The fifth point in that plan is to "champion small businesses."
Many issues that small-business owners care about in an election season -- including immigration policy, regulation, government contracting and access to capital -- were not covered in the debate. But Biden and Ryan got into it over the proper way to tax small-business owners. Obama and Biden want to keep Bush-era tax cuts for those making less than $250,000 while Romney and Ryan pledge to extend those cuts for all.
The GOP candidates say many entrepreneurs report business income on individual tax returns and therefore raising taxes on those making more than $250,000 would hit small-business owners. "This one tax would actually tax about 53 percent of small-business income. It's expected to cost us 710,000 jobs. And you know what? It doesn't even pay for 10 percent of their proposed deficit spending increases," said Ryan. The 710,000 figure comes from a report from the National Federation of Independent Business, an organization that has recently come under fire for an alleged right-leaning bias.
Meanwhile, Biden said 97 percent of small businesses make less than $250,000 per year and therefore would not be impacted by a removal of the Bush-era tax break. "Let me tell you who some of those other small businesses are: Hedge funds that make $600 million, $800 million a year. That's -- that's what they count as small businesses, because they're pass-through," said Biden.
Ryan responded that the tax cut would impact 1 million small businesses that are "our greatest job creators."
The next debate between the presidential candidates is Tuesday at Hofstra University on New York's Long Island. CNN Chief Political Correspondent Candy Crowley will moderate the town-hall style debate, where citizens will have the opportunity to ask Obama and Romney questions.
What did you think of the candidates' performances in the vice-presidential debate? 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.