The "Small Business Jobs Act of 2010" has nothing to do with small business
by chuckblakeman, Window Shopper
- Created: October 14, 2010, 11:34 am
Nothing could demonstrate more clearly how out of touch politicians are with 'small business' than the Small Business Jobs Act of 2010. And nothing could demonstrate their ongoing desire to scratch the backs of the their big business cronies than this charade.
This incentive is about as helpful to small business as a mouse trap is for a mouse. It does nothing to stimulate investment in small business and continues to give perks to big businesses that hurt small businesses.
When the government (the SBA) says 'small business', it defines that as any business with fewer than 500 employees. That includes 99.7% of all businesses in America and is no different than saying anyone under 7' tall is 'short'.
Is a business with 499 employees 'small'? In 2009, Australia passed the Fair Trade Act that legally defines a small business as having fewer than 15 employees. No one would argue that 100% of the businesses involved in Australia's definition are truly small. But let's even go as high as 20 employees - Here's how much this bill helps those businesses:
1) This bill only allows for investment in C Corporations. C Corp status is actually a very bad entity structure for 99.9% of businesses under 20 employees. Virtually no businesses of this size should be a C Corp and couldn't afford to be one. So this definition of 'small' knocks out almost 100% of small businesses right out of the gate.
2) It must be a 'qualified trade or business', which this bill defines as non-service sector jobs. A large portion of true small businesses are service sector companies. Why are they excluded? Simple - they are almost exclusively non-union companies. The politicians want this money going to their big business/big union cronies who fund their re-election.
3) The investment must be held for five years to qualify! Investors are looking for small businesses that will grow quickly and give them a return within 2-3 years, sometimes up to five. Private investment money is not built around making 5+ year investments - if their money is stuck that long, they aren't going to make the investment.
So there is NOTHING here for small businesses.
When will American small businesses realize that there is no one watching the shop for them in Washington on either side of the aisle, including the supposed SBA which is focused on 7' tall companies, not 'small' ones?
And almost no one is watching the shop for them amongst the thousands of consultants and journalists that pretend to serve the small business community as well. Everybody is in love with 'big', whether it is big business or big government, they're all working together to help each other get bigger.
We need to stop the flow of favors, bailouts, laws, regulations and incentives coming out of Washington and the SBA that continue to make life easier for big businesses at the direct expense of the 28 million small business owners in the U.S. This legislation is simply another favor for big business at the expense of small business, but because the government and the SBA includes 7' tall people in their definition of 'short', we all sit back and congratulate them as they get another photo op with 'small' business owners.
Wake up, small business owners! They aren't on your side, and are proactively working against you at every step of the way to fund their big business re-election friends.
We need a cabinet-level small business advocate whose sole purpose is NOT to get perks for small business but to stop the unbalanced ongoing bailouts, favors and incentives that flow relentlessly out of big government on both sides of the aisle into big businesses standing around the beltway with their hands out.
The 'Small Business Jobs Act of 2010' is just another one of these big business incentives. Enough is enough. Vote for anyone you know that is truly for supporting the 28 small businesses in America. And good luck finding that rare politician who is actually doing it.
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