White House budget offers benefits, drawbacks for small business
The budget proposal unveiled by President Obama this week offers plenty of items that will affect small businesses from new tax credits to a hike in the minimum wage.
Here’s a quick guide to some of the proposals included in the administration’s $3.8 trillion budget that could impact your business:
- A tax credit for hiring or giving raises – Companies that paid less than $20 million in wages in 2012 can receive a 10 percent credit for the amount paid to new hires and in raises to current employees
- More SBA loan options – The budget calls for the elimination of fees on Small Business Administration loans under $150,000 through the 7(a) program, as well as the restoration of the 504 Loan Refinancing program, which made it easier for small business to refinance debt.
- Higher minimum wage – The proposal would raise the federal minimum wage from its current $7.25 to $9 an hour
- Lower SBA budget – The White House plan cuts the SBA’s annual budget to $810 million, $109 million lower than in 2012. The administration said it expects fewer loan defaults, which should keep costs lower.
- The “Buffett Rule” – For those households with more than $1 million in income there would be a minimum tax rate of 30 percent. Some small business groups have argued that would hurt job creation by small business owners, especially those that are “pass-through” entities.
To read the full budget, visit the White House website.