Presidential address highlights small business initiatives

9/9/2011

In a recent speech addressing economic concerns, President Barack Obama laid out the details of his American Jobs Act, which contains provisions that may benefit small businesses.

One of the top means of spurring hiring and helping small businesses with financing growth is the prospective payroll tax cut. This is a measure that has been discussed and analyzed in recent months and has found bipartisan support in Congress, including other early front runners for the 2012 presidential election.

The plan would reduce payroll taxes by 50 percent on the initial $5 million in payroll, with the future rate cut in half from 6.2 to 3.1 percent for all sizes of businesses. By lowering the payroll tax, the government could save both companies and employees money, potentially thousands of dollars per year for many businesses.

Another major feature of the White House's plan is a change in regulations and contracting for small businesses. Through the U.S. Small Business Administration (a federal organization helping entrepreneurs with commercial funding and small business resources), the American Jobs Act aims to bring more infrastructure projects to smaller firms, reduce regulatory burdens to ease the creation of new businesses and jobs, while streamlining the government contractor payment process.