Archive for September, 2010

Reports of the latest employment numbers show that job creation is still lagging, and it is a story that businesses of all sizes are experiencing firsthand. Throughout the month of August, the White House and members of Congress have been touting proposals that they hope to take up once returning from summer recess. Not lost is the partisan point-keeping that tends to increase in an election year while slowing down the legislative process.

As small businesses continue to struggle to obtain credit to start or grow their business, President Obama has urged lawmakers to pass a host of tax cuts and expand the federal loan program through the Small Business Administration (SBA).

Andrea Caplan, owner of the Body Politic, a massage studio, is a one-person business waiting for Congress to make changes. Like other businesses in the service sector, the massage studio has remained solvent throughout the economic downturn, though not without work. Caplan has been in the same Bethesda, Maryland, location for five and a half years, saying that many clients hear about her from online rating sites and word-of-mouth. She has vowed to keep her services at a steady price point, which has not been easy.

“I don’t do discounts because I find that I resent them, but I haven’t raised my fees in three years, even when costs have gone up for me, and I just try to get better and better at what I do.”

With elections around the corner, it’s now likely lawmakers will spend less time moving legislation than on politicking, especially about the economy. Unfortunately, that would leave the nation’s self-employed stuck in the same rut they have been in since the recession began in 2007.

Here’s how: In general, lawmakers “talk the talk” about small business leading us out of the recession, but they have yet to “walk the walk.” On their agenda this month is the Small Business Jobs Act of 2010, a bill that provides needed funding, tax breaks and increased outreach to businesses. It received bipartisan support in both chambers of Congress. However, the bill languished in the Senate in July. This leaves business owners wondering, “Is Congress going to finish what they started?”

The vast majority – 95% – of all small businesses in the United States are either self-employed entrepreneurs or micro-businesses. So far, Wall Street has received close to $5 trillion dollars in aid. Earlier this month, Congress was called back from recess to approve emergency funding for states, which included $10 billion for education-related jobs. Right now, the self-employed can only say this to Congress: “We are still waiting.”

We have all heard Washington talk about creating more jobs, but in putting off this type of legislation, lawmakers continue to turn their  backs on the nation’s most plentiful job creators. Congress has failed to ask the larger question, which is: “What are we doing to help day-to-day financial health of our small businesses?”

By focusing merely on one portion of the bill, the tax equity for the self-employed provision, one can see that there is tax savings of over 15 percent – that’s a big bottom line difference to the small mom-and-pop shops located around the country. Sole-proprietors would receive a one-year, temporary business deduction for their health insurance costs providing them significant savings on their self-employment (payroll) taxes. This deduction is currently enjoyed by all other business types.

Though only some of the provisions will benefit the nation’s smallest firms, Caplan feels like the legislation is a step in the right direction.

“If it would give sole proprietors like me any kind of a break on taxes on our health insurance, then I’m all for it. Even if it’s temporary – for one year only, I could use the money on some other business expense, like advertising or office improvements.”

The ongoing battle for visibility is one reason the National Association for the Self-Employed (NASE) is undertaking a public awareness campaign on behalf of the nation’s entrepreneurs. We believe that creating your own job is just as important as being hired for an office or factory job. The nation’s self-employed keep the economy hopping, which is why Congress needs to stop the partisan sniping and pass a bill that’s good for America – the Small Business Jobs Act.

About the author

Kristie Arslan is the Executive Director of Legislative Offices for the National Association for the Self-Employed. The NASE is the nation’s leading resource for the self-employed and micro-businesses, bringing a wide range of benefits to help entrepreneurs succeed and to drive the continued growth of this vital segment of the American economy. The NASE is a 501(c)(6) non-profit organization and provides big-business advantages to hundreds of thousands of micro-businesses across the United States. For more information, visit the association’s website at www.NASE.org.