What Small Businesses Say About Potential Hiring Tax Credit
President Obama unveiled a tax credit for small business owners as an incentive to get them to hire as part of his jobs plan last Thursday before Congress, which will pay up to $4,000 to small businesses for hiring a person who has been unemployed for at least six months.
If the employee is a veteran, the credit would jump to $5,600, if the vet was injured in the line of duty, the credit can reach up to $9,600.
“Everyone here knows that small businesses are where most new jobs begin. And you know that while corporate profits have come roaring back, smaller companies haven't. So for everyone who speaks so passionately about making life easier for ‘job creators,’ this plan is for you,” the president said in his speech to Congress.
So what do small business owners think the tax credit will do? Here's what three of our featured businesses had to say.
Pi Pizzeria, St. Louis, Mo.
Chris Sommers, co-founder of Pi Pizzeria, said the tax break has great potential to help small business owners and the economy as a whole.
"Those who are on the fence as to whether they can afford to hire will have that little extra encouragement and security in their decision to expand their workforce," he said. "It's unfortunate that so many large companies are sitting on so much cash, using the excuse of too much uncertainty in the economy to justify their lack of hiring. Truth is, most of these companies have just figured out to do more with less, how to squeeze more work out of their existing workforce here and with outsourcing. Many have returned to significant profitability in these lean times. These jobs aren't coming back, so it will be up to small business owners to pick up the slack."
Sommers continue to say he isn’t taxed enough as an individual.
"I am fortunate to do well, and I pay a lot in taxes, but I can pay more," he said. "A couple of percent increases in my federal income tax levels is not going to prevent me from hiring, and will certainly help get the country on better footing."
toolhangerz, Cincinnati, Ohio
Jim Browning, owner of toolhangerz, agreed the tax credit would be a good incentive for small business owners to hire and would also help bring down the unemployment rate.
"For my own personal business, I am not at the stage where it will impact me because I am a new startup and a one-man shop. But the small business owners I know and am targeting, it will probably help them."
Overall, Browning said he would like to see the administration take a greater interest in true startups—those with one or just a handful employees.
"They have to really look at the entrepreneurs who are single-person shops to 10-person shops in order to have an impact," he said. "Startups should be a real concern, and there should be a focus on available capital."
While Browning said he is in a position to be self funding, he knows his circumstance is in the minority among entrepreneurs.
"I am running on a shoestring. People have ideas and need capital, but can't get access to it. If I expand, I will be in the same boat. Will I be able to get it?"
EdenSong Essentials Edible Skin Food, Nashville, Tenn.
Stephanie Rountree, owner of EdenSong Essentials Edible Skin Food, said she is hopeful the credit will help her fellow entrepreneurs, but she’s not banking on it.
"I hope it has an impact, but I'm not sure that it's anything more than the typical political doublespeak. I am a half-full girl, as opposed to the glass half empty."