Small business owners watch the tax reform debate as 2012 elections approach

9/13/2011

As opinions of President Barack Obama's proposed American Jobs Act pour out of Washington, and politicians create new plans to tackle unemployment and the economy in anticipation of the 2012 presidential, senate and congressional elections, a single theme seems to be central to the debate: small businesses.

President Obama's recently announced AJA, if passed, will lower the payroll tax for companies of all sizes, along with providing tax incentives to businesses that hire or create pay increases. The payroll tax cut is enjoying bipartisan support, and may be the driving force in the passage of the bill.

Corporate tax reform is proving to be a more contentious issue, as a large number of small businesses aren't corporations, or don't wish to or don't have the finances to incorporate. The U.S. Small Business Administration estimated 27.5 million American businesses were considered "small" in 2009, the vast majority of the nation's companies.

Should corporate tax reform be enacted, large firms may aid the sluggish economy through growth and success, but small businesses may continue to see the same current problems with commercial funding and keeping employees on the payroll.