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Obama & McCain Battle for
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2008 is a landmark year in politics. No matter who wins the White House, history will be made. I’m excited about that, because as of November 5, a glass ceiling will be permanently broken in the United States of America. I may or may not like the candidate who breaks that ceiling, but I cannot help but be happy about the fact that it will be broken.
Ever since the 2000 election, I’ve known just how important it is to be active in politics. Al Gore lost the election to George Bush over 537 votes. It struck me at that time that one person could influence 537 votes in a campaign. So one person can theoretically alter our political history.
2008 is also a landmark for Sparkplugging in that I haven’t been willing to talk politics on my blog before now. It’s too divisive, too polarizing. But this election will affect us as entrepreneurs and small business owners – and I believe it is important for you to know how your vote will affect your business. So today I kick off a series of articles to help educate all of us on how each candidate plans on changing the way we work and live. I’ll be focusing specifically on the topics of interest to very small businesses, 1-3 employees, and for entrepreneurs/startups.
Obama on Taxes Affecting Small Businesses
- Democrats have a reputation for raising taxes, and Obama will do that to small businesses – but only if you make more than $250K a year.
- He is also considering imposing Social Security payroll taxes on salaries and wages above $250,000 in the range of 2% to 4%, which may or may not affect you (but will affect larger businesses much more).
- The top two tax rates would revert back to 36% and 39.6%. But roughly 97 percent of all small businesses would not be affected at all by increases in the top two tax rates (source).
- Obama has some tax cuts planned as well – he will eliminate all capital gains for small business start ups and make the Research and Development tax credit permanent.
Obama on Workplace Issues
While most of these issues are more important to employees than to entrepreneurs, they could affect you as an employer. They also give an indication of what the candidate’s priorities are, which will influence other decisions affecting small businesses
- Obama wants to expand FMLA (Family Medical Leave Act) to 25 employees (from current 50 threshold). Expand the number of purposes for use (elder care, kids’ academic activities, etc.).
- He will raise the minimum wage and index to compensate for inflation.
Obama on Health Care
If you think health care has little to do with small business, then read on – these could greatly impact your expenses if you have employees. But like the FMLA, there may be a minimum number of employees your business has to have in order to be required to comply with these new laws.
- A new business mandate requiring businesses to buy health insurance coverage, contribute to private coverage, or contribute a portion of payroll toward public plan: “play or pay”.
- Small businesses would be able to buy into a national federal pool to receive a refundable tax credit up to 50% on premiums paid for employees.
- The government would reimburse employers’ health plans paying for a portion of the catastrophic cost they incur above a threshold if they use the savings to reduce the cost of workers’ premiums.
Obama on Immigration
- If you employ illegal immigrants, be prepared for a crackdown and get ready to electronically verify your employees.
Obama on Federal Spending
- If you do business with the federal government, there will be a new mandatory bid process in place for any project or contract over $25,000.
Obama on Small Business Initiatives
Most important of all are the candidates’ plans for how to support the startup and growth of new small businesses. Here are Obama’s plans:
- Establish a small business and microenterprise initiative for rural America – 20% tax credit for $50,000 investments in small businesses
- Expand the SBA (Small Business Administration) and micro-loan programs
- Implement a Women-Owned Business contracting program
- Strengthen SBA capital access programs directed at minority-owned businesses
Learn More About Barack Obama
I DO NOT claim to know all that I could know about any of the candidates. So I encourage you to leave a comment with your own information and ideas – but please be civil and please cite sources if you are going to state facts. I’ll warn you now that any attacks on me or my readers will be deleted immediately. But you can attack ideas all you want.
You can learn more about Obama at his website, and additionally you can find him nearly everywhere on the web, like Twitter, Facebook, MySpace, YouTube, LinkedIn, BlackPlanet, and even Flickr.
Many thanks to the Small Business & Entrepreneurial Council for their candidate campaign report, which was the main source of information for this article. The SBEC is a lobbying group dedicated to influencing legislation and public policy as an advocate for small businesses and entrepreneurs.
Next up in this series will be highlights of where John McCain stands on his campaign promises that will affect you.
And if you are sold on Obama, Momsational has the scoop on how to get a Free Obama Bumper Sticker!
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Sparkplugging Founder Wendy Piersall is dang passionate about helping people start & grow a business while maintaining life balance (somehow). 
Easton Ellsworth is owner of 
BRAVO Wendy!
Contrary to the silly comments that I got while twittering last night during the RNC about how political blogging is ‘bad’ for business, I believe we have a duty to speak our hearts & minds on such important issues. Informed people make smart choices.
Keep up the good work!
Cheers,
Ros
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Just to clarify – I was taking the heat for political tweeting – not giving it.
Rosalind Gardners last blog post..Super Affiliate Handbook Review on AssociatePrograms.com
Does that mean if the entire business makes more than $250K a year, or just one person? I could be wrong but a business with a small crew of employees making $250K a year doesn’t seem like a whole lot to me, especially if they work in a state that already has an income tax of its own. A business that has a substantial overhead cost could also get really screwed over here.
Raising the minimum wage on a national level is going to force some small businesses to cut back on the workforce and impose harsher conditions due to lack of having enough employees to spread the work around. I’ve never understood why, if they HAVE to institute minimum wage, it can’t be based on locality rather than an arbitrary national standard. $5 in New York City is not the same as $5 in Smalltown, Nebraska.
Lincoln,
I can’t give you a completely informed answer, but businesses are taxed differently than individuals to begin with. Corporations are taxed on their profits, and business owners are taxed on their income from the business. I’ve worked for myself for more than 8 years and never paid business taxes, because all of my income went to me through the business – I was taxed personally, as an employee of my own company – just like any other employee.
Nobody – individuals or corporations – are taxed on their gross income, only on income after expenses.
Also, as much as I believe that the minimum wage should be increased with inflation, I do totally agree with you that it should be determined at a local level. I bought way more groceries when I lived in rural Colorado than I would have been able to with that money in Chicago!
@ Ros – I’m always so happy to see you when you drop by – thanks for commenting!
Overall I like your article. I would have liked links to all sources for all paragraphs, though. But your online resources for more are adequate.
This is great stuff–substantial, fact-based. Just what’s needed in a political season.
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Huzzah! Not only because I share your presidential leanings, but also because I appreciate your dispassionate presentation of the facts.
Wendy,
I don’t know how much of a distinction is made between sole proprietorship and an LLC or incorporated entity, but if it’s anything like Canada, I can see how a business person can get hosed pretty quickly because of two distinct special interests: lawyers and accountants. You”ll get taxed up the ying yang under a sole-prop but if you incorporate the tax breaks are very substantial. The only problem is you have to enlist the aid of an attorney and an accountant in order to file for an Inc. and get those benefits, for what you have to pay for those kinds of headaches, it can be a pain, even if the tradeoff is worth it.
I really wish the government would simplify and stop this overly complicated taxing nonsense. Ignore the cottage industries that live and die according to the byzantine nature of our tax code, institute a flat tax that reduces oversight, penalties and closes all the loopholes that only the most affluent can exploit, and enact a system of competitive fairness that precludes powerful companies from using their monopolistic status to circle the wagons and prevent and even punish small businesses from enjoying their level of success *cough*Google*cough*.
If Obama has any proposed policy that resembles these approaches, his economic platform would certainly be more appealing.
The problem with politicians though is that regardless of party, what they propose to do, and what they actually do when in office are often two different things.
On a similar but slightly different topic: I recently wrote a post about what small businesses can learn from Barack Obama. I think there are two things: 1. His teacher mentality and 2. his transparency.
Small business owners should take not of how he used these two things to propel himself into a position of great importance.
You can read the full post here: http://unraveledideamill.com/node/28
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Wendy this is a fantastic post and I hope you keep getting the message out. I’m so darn sick of paying taxes and fees. I told my husband if we ever totaled up the taxes we pay on our phones, food, IRS, every utility bill and now airline tickets etc etc..we might find we only keep 40% of our income before we spend a dime for ourselves.
This government has got to consider reducing the spending and the amount of political representation we have or we’ll be bankrupt. And I wish someone would print the benefits our congress has given themselves in the last ten years. It unbelievable…
By the way, my PET scan which I had to fight Blue Cross to get approved, gave me a clean bill of health…I’m so happy I’ve been able to write and work as I did before the Ovarian Cancer….
Dorothy from grammology
http://www.grammology.com
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I didnt read a single thing I like. Obama seems totally hostile to business to me, and its even more frightening that he is saying this to get elected….I tremble over what he may actually do. Why penalize success? Why do the most successful have to pay more?
One thing you can count on from a rich person is that they will use their money to try to make even more money. When this happens, it requires INVESTMENT….dumping the money directly into the active economy. Even if the money is in a bank, it STILL gets invested.
I for one would rather let rich people and successful business invest the money that then for the government to take it away and watch it be wasted.
What a great synopsis Wendy! Thank you for the information
I look forward to reading about McCain next.
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Wendy,
Many thanks for laying the facts on the line for us. I appreciate your mostly unbiased “coverage” of Obama and look forward to what you have to say about McCain.
I have been on the fence for much of this election because no matter what the candidates say they will do, it all boils down to what they really have the power to do. For instance, they may say they will cut taxes or take from the rich and give to the poor but unless Congress passes it or there is money to do so, their hands are tied.
And if they promise social reform (as many candidates throughout history have), it will remain to be seen if they can actually pull it off. It seems we hear the same promises from both sides time and again.
Change! Let’s face it, no matter who gets into office, there will be CHANGE because President Bush cannot run again!
I am looking forward to seeing what goes on in the next 60 days….
Warmest regards,
Heidi Richards Mooney ~ Founder
Grow a Million Dollar Business Summit: http://www.WhereWomenProsper.com
Wendy, thanks for this. It neatly outlines the whole process.
And, in response to @Lincoln about the costs of creating a corporation, it’s not nearly what you think.
In terms of an accountant- anyone in small business should have an accountant regardless- there are too many deductions and it’s too complicated, sole prop or not.
And as for incorporating, it cost us a $50 filing fee with Oregon (I know other states have higher fees- some as high as -shock- a few hundred dollars) and the cost of a book that walked us through the process. Incredibly easy. We didn’t need a lawyer, even to file the subchapter S.
And, if you have a company that makes a PROFIT of over $250K (that includes after you’ve paid your expenses, including all salaries and bonuses), and that $250K is just sitting there, well- I’m guessing you’d have to be doing either a few million a year in revenue, or you have amazing profit margins.
And either way, I’m doubting the tax increase would impact anyone’s personal lifestyle that much.
If you need the $250K for biz expansion? Well, if you spend it, you’re not paying taxes on it…
@ Mark Silver:
Thanks for explaining this for Lincoln – you did a much better job than I did.
Great idea, Wendy! I look forward to all you have to say…I definitely think it’s important for people to know all there is to know about the issues that are important to them.
I also wanted to make a small note to @Frank. This isn’t an attack, just an opinion on why some people think the wealthiest should pay the most taxes.
It’s sensible to think that those with the most money are in a better position to help contribute to society, and it seems to me that it has always been America’s stance that we help those less fortunate than ourselves. Just as our country reaches out as the stronghold it is to help other countries with their needs, our country relies on those “stronghold” individuals to help other individuals with their needs.
Those needs are supported by taxes. Taxation is a necessary evil, and if you go back into the furthest reaches of history, you’ll see it always has been – and not just in America.
Yes, I believe cutting spending is good too, but there’s only so much spending you can cut before it turns around and affects the economy through layoffs, homelessness, increased economic crime, bankruptcy, local development and other stuff. It’s all a big vicious circle, and the trick is to find a good balance between cutting spending and taxing.
Great article. You have done the research and presented the facts. Most people do not understand what Obama offers for the small businessman or the people. Small businesses will survive the small tax increase if any. It is the big businesses that McCain supports and looks out for.
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Diane, you mischaracterize my position. i am NOT advocating no taxation, that perposterous. My argument is the level of same. Do you think that a trillion dollars a year is emnough? Or does the back hole we call a government need more? And why penalize the most successful? Let THEM have their money to make more money….the economy will benefit MUCH MORE in the long run and the short run.
Diane,
Well put, and I would like to add that in many cases business and the wealthy benefit from social programs – education lowers crime rates, and prepares a workforce for tomorrow’s jobs – both of which improve the business environment.
Those who benefit from the stable business environment/infrastructure/human infrastructure that the U.S. supplies should think twice about proposing to remove support for the programs that support those things.
The National Federation of Independent Businesses has a side-by-side comparison of the candidates how their issues affect businesses:
http://nfibelection2008.illumen.org/sidebyside.jsf