Small firms across America awoke on November 7 to news that their small business champion had failed. Governor Mitt Romney admitted defeat early Wednesday morning, just after midnight.
Meanwhile, incumbent Barack Obama won crucial electoral votes from swing states Florida and Ohio, the latter serving up the crushing blow for Romney and the GOP.
What can small businesses expect from Barack Obama now that he has won four more years as the President of the United States?
The Patient Protection and Affordable Care Act is here to stay.
The defeat of Mitt Romney and reelection of President Obama means one major thing for Obamacare: it’s here to stay. Small business (and franchises) would do well to research what this means for their particular firm, especially those with 50 or more full-time employees.
Beginning in 2014, firms with 50 or more full-time workers will be required to provide their workforce with health-insurance benefits or pay a penalty. Another proviso of the law enforces an additional 3.8% tax on upper-income households beginning Jan. 1.
Taxes will rise for couples making less than $250,000 a year.
Tax policy was a particularly important issue for small business owners during the general election as many of them declare their business incomes on their personal returns.
During his campaign, President Obama said he supported extending the Bush-era tax cuts for couples making less than $250,000 a year. Mr. Obama also supports letting those tax cuts expire for higher earners and also creating a new minimum tax for those who make $1 million or more.
For those who count themselves as ‘higher earners’ that means a top marginal tax rate of 39.6% for salaries and wages. The top rate on dividends for upper-income households would be higher — 43.4%– when the aforementioned 3.8% tax kicks in on Jan. 1.
The fiscal cliff still looms.
The aptly-named fiscal cliff still looms before the country as January 1, 2013 quickly approaches. The fiscal cliff, created by the laziest Congress ever and Mr. Obama last year in order to lift the debt ceiling, threatens the U.S.’ economic recovery. If the 113th Congress doesn’t do something– and do something immediately — the deep spending cuts and tax increases could push our fragile economy back into a recession– or worse.
Both Democrats and Republicans want to avoid the deep cuts but cannot agree on how to replace them.
Shocking, I know.
Promise on the horizon for small businesses that need capital.
Access to capital has been a substantial hurdle for business owners just starting out or looking to expand since the recession as banks — large and small — are slow to lend. The Jumpstart Our Business Startups Act could provide relief as it includes a provision allowing small businesses to raise as much as $1 million in equity funding using crowd-funding websites. Of course, the crowd-funding websites will have to register with the Securities and Exchange Commission, but it’s a step in the right direction.