YORK — Tax relief for small businesses that hired or
gave raises to their workers last year is among the
proposals that President Barack Obama revealed in his
$3.8 trillion budget plan on Monday.
budget message for the fiscal year that begins Oct. 1
also contains proposals that would streamline the
application process for Small Business Administration
loans and increase the number of lenders working with
tax credit, aimed at giving small businesses an
incentive to hire and raise employees' pay, would be
for companies that paid less than $20 million in wages
in 2012. They could get a one-time credit of 10
percent for the amount paid to new workers and in
raises to current workers. There would be a limit of
$5 million on the credit.
budget proposal allocates $810 million for the Small
Business Administration, a drop of $109 million, or 12
percent from the 2012 budget. But Obama's proposal
also repeats a suggestion he has made in the past, to
include the SBA in a consolidation of agencies and
programs that promote business and trade.
also reiterated Obama's proposal to raise the federal
minimum wage to $9 an hour from the current rate of
$7.25, made in his State of the Union address in
February. The minimum wage proposal has been
criticized by small businesses that say they can't
afford to pay their workers more.
a look at some of the other proposals that would
affect small business:
for what are known as SBA 7(a) loans would be waived
for loans under $150,000.
businesses would again be able to refinance what are
called 504 loans. These loans are normally used to
purchase or expand property. The Small Business Jobs
Act of 2010 allowed for refinancings only through
Sept. 30, 2012. The proposal would extend the
refinancing provision through Sept. 30, 2014.
application process for SBA 7(a) loans would be
streamlined under a $7 million program, SBA ONE, which
is expected to increase the number of lenders working
with the agency.
State Small Business Credit Initiative, a program
created in 2010 to help foster lending to small
companies, would get $2 million to increase the
assistance it gives to businesses.
SBA would get $4 million to hire 32 employees who
would work with federal agencies to increase the
number of government contracts with small businesses.
proposal provides for $1 billion to start a network of
15 manufacturing innovation institutes across the
country. They would be modeled after one in
Youngstown, Ohio. Obama first proposed the creation of
the network in his State of the Union address.
budget got mixed reviews from small business advocacy
National Federation of Independent Business criticized
Obama's minimum wage proposal and said it would limit
the number of jobs created by small businesses.
of all ages that are relatively unskilled are
adversely impacted by this policy because they can't
break into the job market, and small-business owners
can't afford to create new positions for them,"
the NFIB said. The group focused on Obama's overall
$3.8 billion budget proposal in its statement, and
said it wouldn't do enough to lower the federal
group, Small Business Majority said it was pleased
with Obama's proposal to give small businesses a tax
credit for hiring employees and giving raises, and
with its manufacturing initiatives. The group said
those and other parts of the proposal would give small
businesses economic opportunities and help them create