You can be on Entrepreneur’s cover!

Should Small-Business Owners Get a New Tax Break? New help on the way for small-business owners as the Obama administration works to keep the recovery from heading back into a nosedive.

By Carol Tice

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

You may have noticed the economy is still sucking wind. Unemployment has stayed stubbornly high, and May saw the least job growth of any month in the past eight. There are worries that the fragile recovery may be slowing down again, with some observers beginning to discuss the possibility that we could be headed down again, into a dreaded double-dip recession.

As a result, there may be new help on the way for small-business owners, as the Obama administration works to keep the recovery from heading back into a nosedive. Word is several proposals are being discussed. It's still an open question whether any will come to pass -- and if they did, if federal tax breaks would do the trick.

One proposed plan to stimulate hiring that's making the rounds is a cut in payroll taxes. A primary advantage of this idea is that it has a chance of actually becoming law, as pro-business Republican lawmakers have said they're in favor of this type of maneuver right now.

It's another question whether a payroll-tax reduction would really lead to more hiring. Breaks small businesses received earlier in the downturn for hiring don't seem to have created a job boom.

There is an obstacle to this type of tax relief winning approval: The growing feeling that small business are perhaps not the prime engine of the economic recovery they've been billed as during these lean years. Rates of small-business creation have been contracting since the 1980s, a study by The Kauffman Foundation recently found. One theory: The financial-sector boom sucked up talent that might otherwise have started new enterprises.

Existing small businesses have been cash-strapped and hard-pressed to add staff, even if they see market opportunity. Which begs the question of whether some other form of assistance might be better for helping small businesses grow -- maybe another loan-stimulus package, or more funding for mentoring through SBA.

Some have pointed to the persistent real-estate price slump as a major culprit in the economy's ongoing doldrums. Taking steps to resolve the backlog of foreclosed properties that need to be liquidated might get the whole positive cycle going again -- people buy homes, pay for goods and services to fix them up, and then borrow out and spend the equity they create. Businesses benefit at many points in that cycle.

What, if any, federal assistance would help your business hire? Leave a comment and share your ideas.

Carol Tice

Owner of Make a Living Writing

Longtime Seattle business writer Carol Tice has written for Entrepreneur, Forbes, Delta Sky and many more. She writes the award-winning Make a Living Writing blog. Her new ebook for Oberlo is Crowdfunding for Entrepreneurs.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Leadership

What We Have to Gain By Talking About Grief and Loss At Work

I lost my husband to cancer during Covid — here's how it changed how I lead at work.

Money & Finance

5 Simple Wealth-Building Tips For This Generation's Forward-Thinkers

Explore practical finance tips for young professionals striving to overcome economic challenges.

Fundraising

Avoid These 9 Pitch Deck Mistakes When Asking Others For Money

Crafting an efficient pitch deck requires serious effort, but at least it's not wandering in the dark since certain rules are shaped by decades of relationships between startups and investors.

Business News

Mark Zuckerberg Says This CEO Is the 'Taylor Swift' of Tech

Meta's CEO posed with Nvidia CEO Jensen Huang on Instagram Wednesday.

Growing a Business

To Achieve Sustainable Success, You Need to Stop Focusing on Disruption. Here's Why — and What You Must Focus on Instead.

Instead of zeroing in solely on disruptive innovation, embrace a pragmatic approach to innovation, recognizing and leveraging the potential within ongoing industry shifts.

Real Estate

3 Emerging Trends Shaping the Future of Real Estate

These three innovations are reshaping the real estate industry — discover tips for effectively covering these trends.