Mixed Reaction to New Congress from Small Business Groups

Health coverage, taxes and government regulation, the most difficult problems for small businesses, are issues that a lot of newly elected representative to the U.S. House of Representatives understand, according to Dan Danner, senior vice president for public policy with the National Federation of Independent Business (NFIB), the Associated Press reports.

“Fortunately, the issues that affect small business don’t have party labels, so we’re very hopeful that the new Congress will care about the things that our small business owners do – available and affordable health care, less lawsuits and fewer burdensome regulations.”

Leading up to the mid-term election, more than 90 percent of those who owned their own businesses for more than five years said they planned to vote, Inc.com. reported, indicating a high level of interest in the outcome.

One major concern for small business owners that is not likely to be resolved easily is the proposed repeal of the estate tax, a measure opposed by Democrats. Small business advocates also want the current estate tax, which exempts the first $2 million from federal taxes and has a cap of 46 percent, to be made permanent, the AP says.

Carol Kuc, president of the National Association of Women Business Owners, based in McLean, Virginia, is hoping that Congress will pass legislation allowing small business owners to deduct the full expense of meals and entertainment. Small businesses “do their advertising primarily through entertainment and meals”, she says, according to the AP, and should be able to deduct more than the current 50%.

Another tax issue on the minds of small business owners is the future of the Section 179 tax deduction, said Cheryl Womac, chairwoman of Leading Women Entrepreneurs of the World, according to the AP in a separate report. This deduction permits small businesses to deduct upfront the costs of certain business equipment.

Legislation supporting association health plans, which would allow small businesses to band together across state lines to buy insurance in groups, is stalled in Congress, the AP says, and probably does not have a future in the Democrat-controlled Congress. But Kristie Darien, executive director of the National Association for the Self-Employed’s legislative office, says that the Democrats are likely to seek tax credits to help small businesses with health care expenses.

An increase in the federal minimum wage is high on the Democrats’ legislative agenda and is likely to pass, but according to Darien and Todd McCracken, president of the National Small Business Association, the increase will not be a big problem for their groups’ membership because they tend to pay employees more the minimum, the AP says. The NFIB opposes an increase in the minimum wage but will look for some tax help for businesses that will be hurt by the increase.

Rep. Nydia Velazquez (D-NY), who will succeed Rep. Don Manzullo (R.-Ill), outgoing chairman of the House Small Business Committee, has criticized the Republicans and the administration for sluggish job growth and the growing federal deficit, Inc.com says. She has said that few small business owners qualify for the most recent tax cuts and many small business contracts have been miscoded in recent years and went to large firms.

“Rising health-care and energy costs, coupled with a decline in access to affordable capital has hampered the ability of entrepreneurs across the country to establish and expand successful enterprises,” Velazquez said in a recent statement, according to Inc.com.

Darien thinks that the new Congress will expand the Small Business Administration (SBA) loan programs. “They’ve gotten considerable cuts over the years,” she told the AP.

For some business owners, the likelihood of gridlock in Washington with a Democratic Congress and a Republican President is itself a plus because it could mean no major changes, relieving business owners of uncertainty, the AP says.

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