Obama And McCain On Small Business

CBS Evening News: How The Candidates' Proposals Would Affect Your Community

(CBS)  To help you make an informed decision in the presidential election, CBS News is devoting a large part of our broadcasts until Nov. 4 to telling you where the candidates stand on major issues - from the war in Iraq to health insurance to education … and a lot more. Each piece will be an in-depth look at the issues facing the 44th president. In this installment, CBS News correspondent Sandra Hughes reports on how the proposed policies of Barack Obama and John McCain to help small businesses would affect you and your community.

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The Issue

For 27 years, they've been gliding through the canals of Naples Island in Long Beach, Calif.

Michael O'Toole, who owns the Gondola Getaway there has 17 part-time workers and four full-time employees.

"We take them out for an hour with a gondolier rowing them. Sort of romantic adventure," O'Toole said.

But it's a rough ride for O'Toole's business during these hard economic times.

And across the country, small-business owners fear being swamped by the credit crunch, rising healthcare costs and taxes.

"It's hard to operate the business while trying to deal with the regulation side at all times and all the taxes that come with it," O'Toole said.

On top of that, the credit crunch hit in the middle of O'Toole's expansion to a second location. Loans suddenly dried up.

Nationwide, 28,000 fewer small business loans have been approved this year. And 67 percent of small-business owners surveyed recently said they've been impacted by the credit crunch.

It's a complaint stretching from California's ocean to its fertile fields.

Mark Murai is a third-generation strawberry grower in California.

He expanded his family farm operation with new strawberry processing plants. Now, he's concerned about the credit crisis.

"When we don't have a good credit line ... some of these unexpected costs hit us. You're going to see businesses closing down," Murai said.

Another worry that keeps Murai up at night is paying for healthcare for his 30 full-time employees, whom he considers like family.

"Does it ever get to a point that you think, 'next year I might not be able to afford health care' for your workers?" Hughes asked.

"I think we look at it more than every year - every month when the premiums come," Murai said.

In fact, small business organizers say paying for employee health care has been the top concern of their members for years - just recently surpassed by fears about the economic crisis.

The Candidates

So, where do the candidates stand on the issues of taxes, the credit crunch and healthcare?

First, on taxes: Experts say at least three out of four small businesses pay taxes through the owner's personal income tax.

Under a Barack Obama administration, couples who make less than $250,000 will either see taxes stay the same - or drop. For those making more, taxes will go up.

Under McCain, there would be no changes to the current tax structure. For the small remaining group of businesses that file corporate taxes, Obama proposes leaving the corporate tax rate at 35 percent. McCain would drop it to 25 percent.

"Cutting the second-highest business tax rate in the world will help American companies compete," McCain said.

In terms of the credit crunch, both candidates supported the government bailout that intended to make credit more readily available.

Even before the recent crisis, Obama said he would help small business raise money by giving incentives to investors.

"I will eliminate capital gains taxes for small business ... that's how we will grow our economy," he said.

McCain proposes helping small businesses invest in themselves by giving tax breaks for equipment and technology.

On healthcare, Obama says he will create a national health insurance network. Large companies would be obligated to pay into it to help defray the cost.

McCain would provide a $2,500 tax credit for individuals to go into the market and buy insurance.

The Impact

Already burdened by what he calls "too many taxes," the seaside entrepreneur bristles at Obama's tax plans.

"Well once again we're right back to the same problem of those let's make if the business is doing good, let's make them pay," O'Toole said. "And ultimately, that's gonna put people out of business."

The farmer sees it the same way.

"When you get to a certain level and you're penalized, I think you lose a little bit of hope," Murai said.

He says he's reluctantly in favor of the government bailout to free up frozen credit and save small businesses.

O'Toole says he's not sure what the bailout will bring, but says something needs fixing in Washington.

"If we're the engine running the country, we need a new mechanic," he said.

What about healthcare?

O'Toole doesn't provide healthcare to his part-time workers; it's too expensive.

He likes Obama's plan, if bigger companies foot the bill.

For Murai, McCain's plan sounds like a wash - without an advantage to employee or business owner. As for Obama's government network …

"Sounds like a bureaucracy. Sounds like something big that's uncontrollable," he said.

Both of the business-owners say this couldn't be a more critical time for small businesses and they hope the next president listens to their needs.

"All we need is an opportunity to succeed," Murai said.

[bschafer07]

As it is clear from the past business owners the reason they are out of business because they didn''t know how to run a business (now head of the CC). The guy who siad anyone who borrows money to pay salaries should go out of business, you see why they are out of business. The truth of the matter is that 10 years ago some small businesses might have been under $250,000 but if you stayed their you soon got pasted over by faster growing business. You have to grow to stay competative, and if you are paying 35 percent taxes and your competion is paying 10% in Mexicao guess who is going to win. No BO does not have a answer he has taxes, that''s how he is going to pay for all those social programs, the same way Jimmy Carter paid for his, and if anybody is old enough to have lived back in the J. Carter presidency you don''t want to go their again. Their is a reason he was a one time president. My first house I was paying 18% interest on my morgage. Look at history, the guy who showed the 8 questions about the presidents what he didn''t point out was that all those was single issues, did any of those have all those things in their presidency, answer NO. You have to be weiry of anybody who would hold up J. Carter as a great president. He is doing right now what he should have done back then, build houses and let leaders run the country.

[a11anr33s3]

On 10/8/08 you interviewed two business owners in California, One was a Gondola business and the other was a strawberry farm owner. You should have also interviewed their employees as to how the 2 candidates plans helped or hindered them. If the media doesn''t present all of the sides to a story we will need to go to PBS to get a balance.

[melpol1]

The outgoing congress is now in the process of giving away the federal treasury to the banks before being replaced by a new administration. Banks will continue to be gifted with billions of extra and unneeded cash. The recent AIG party will look like a high school prom after congressmen say farewell to their banking buddies. Obama and his new administration will be left with nothing but bare bones. They will have no choice except to ask the new congress for the largest tax increase in history. The middle class will have to bear the new tax burden alone. Big business as usual will remain tax free.

[whatiknow2]

Plain and simple,
If you will still be able to afford to support yourself after the business you work for folds under,
If you have all the insurance you need for you and your loved ones,
If your home is paid for and is still worth what you paid for it,
If you are secure with the future as far as your retirement,
If you are not concerned with the amount of taxes you pay,
If your credit rating is over 750,
and If you do not care at all about those who are less fortunate than you,
If you feel comfortable about "Bomb Bomb Bomb IRAN",
If you look forward to a Nuclear war with KOREA,
Then you might be able to afford to vote REPUBLICAN.
Here is your sign
_________
|***VOTE***=
|*McSame!*=
|_________=
| ||
| ||
| ||
I am giving my vote to "THAT ONE"

[mitch5511]

Any business who depends on "credit" to pay for their overhead expenses should not be in business. This is another example of too many people getting into credit card debit. It''s not just individuals...it''s small businesses too.

IMO, if business cannot pay for their overhead w/o dipping into a credit line, they should fail. They need to do a better job of staying within their budgets and saving for reinvestment into the business. Small business can''t compete with the larger business when they don''t have the capital to start with nor can they survive in a credit crunch such as this one when they depend on a "credit" line to pay their bills.

[tibu987]

Truthdig.com
Posted on Oct 6, 2008
By Arthur Blaustein

Fortunately, we don%u2019t have to depend on campaign slogans or advertising bucks to frame the debate. We can look to the record. Here%u2019s the Economic Sweepstakes Quiz. economy. You can choose among six Republicans: Eisenhower, Nixon, Ford, Reagan, Bushes I and II; and five Democrats: Truman, Kennedy, Johnson, Carter and Clinton. (No peeking.)

Which president produced:

1. The highest growth in the gross domestic product?
2. The highest growth in jobs?
3. The biggest increase in personal disposable income after taxes?
4. The highest growth in industrial production?
5. The highest growth in hourly wages?
6. The lowest Misery Index (inflation plus unemployment)?
7. The lowest inflation?
8. The largest reduction in the deficit?

The answers: 1. Harry Truman, 2. Bill Clinton, 3. Lyndon Johnson, 4. John F. Kennedy, 5. Johnson, 6. Truman, 7. Truman, 8. Clinton. In the Economic Sweepstakes, Democratic presidents trounce Republicans eight times out of eight!

If this isn%u2019t enough to destroy the myth that the economy has performed better under Republicans, the stock market has also done better under the Democrats.

[future121]

I am an executive director for a local chamber of commerce and an ex-small business owner for 10 years. I also was a business counselor and worked with a large corporation as job steward, management, and in both small business, large business and residential units for over 29 years. Obama is correct. Most of the small business owners do not make over $250,000 a year. Any profit they might have usually goes back into the business. Small businesses are small S Corp, partnerships, and sole owners which many times claim their business returns along with their personal ones. Even then, they rarely make $250,000. Most large corporations are those with shareholders-which may pay those large CEO payouts for failure to succeed their business. Under Obamas plan the small business owners who out number the large ones would be helped. I personally feel that large corporation which are less than 8% of the economy should pay the higher rate. If they can afford to waste their income on wall street losers to the tune of millions of dollars of golden parachutes, then they can pay the higher taxes!

[jericho4119]

McCain proposes to tax benefits for the first time in our nation''s history! This is a great series, but it becomes misleading when it leaves out the fact that small businesses will be taxed on the benefit plans they offer their employees. As small businesses already struggle to pay for benefits, how many of them will just decide to cancel their benefit programs altogether?

Furthermore, that tax credit McCain provides - $2500 for individuals, $5000 for families - is laughable. Not only is it less than the average cost for health care on the open market - which is $12,500 for a family of four - but it is not even indexed for inflation and we all know that health care costs have been increasing annually at more than the rate of inflation.

McCain proposes to dump millions of Americans on the open market to purchase their own insurance, with a tax credit for less than it would cost to buy insurance and with no protections for those who have a pre-existing condition. So the effect of his plan is to encourage many small businesses to cancel their benefit plans, while leaving their employees who have an existing illness without insurance for the first time in their lives.

All the while he maintains his taxpayer-funded health care. Just whom is serving whom in this relationship?

[formerbiz]

Isn''t this article missing a very important fact: McCain''s plan will add a tax what we spend on insuring our employees. I don''t want to jeopardize that benefit I provide. If my business is taxed for this - essentially I have to pay twice! I might not be able to offer a good health care package, and lose my competitive edge, recruiting the best employees will be harder than ever. I guess if you don''t want to give health care for your workers,... it''s a deal. It certainly gives businesses small and large an incentive to NOT give benefits. But Maybe I just don''t get it, but, but when I read both plans, I don''t see how Obama''s plan is going to tax me more than I am now. I certainly don''t make a quarter mill! Do you? I pour what I earn back into my business. In fact it seems to me that it encourages me to do so, since the less salary I take the more my tax cut will be. And I like the idea the VC might be more interested in me with a tax credit - I could use the capital and don''t trust the banks anymore.

[mcapek]

Obama = kiss of death for small business.
Obama = kiss of death for medical professionals
Obama = great for his lawyer cronies

[Harvybing]

Obama Would Appoint One Of The Crooks Responsible For The Fannie Mae Mess As Attorney General, Effectively Guaranteeing That NONE of the Crooks Would Go To Jail. Signed Sealed And Delivered.

http://www.wnd.com/index.php?pageId=67068

[beckyb59]

Obama want''s to do a lot.Were will he get the money? small business! While McCain is still A Rep., you must admit the Maverick is the most likely to take the "bull by the horns". Check out PitbullPalin.org to show your Vote.

[dloffreda]

As a small business owner I am appalled at the candidates trying to score political points by invoking small business.
My experience has been that most politicians pay lip-service to ''small business as the backbone of America''., while in reality the track record of this Administration in helping small business is pitiful. We have to jump through multiple hoops to get certified as a small, minority or woman owned business just to chase the ''carrot'' of government contracts. Meanwhile companies like Halliburton receive no-bid, multi-billion dollar contracts for Iraq reconstruction. The SBA is under congressional investigation for allowing large, multi-million dollar companies qualify as small businesses in order to receive government contracts. The SBA''s HUB Zone program may be shut down because large companies game the system to obtain the certification without having any presence in an economically under-developed HUB Zone.
If by ''Small business'' the candidates really mean large businesses masquerading as small businesses, then they may be correct.
Otherwise don''t use us to garner points.

[wfrances]

Really a great article and very informative.

As a small business owner I am really concerned about the upcoming election. I have 10 years until I can retire but if Obama wins I see no choice but to sell my business and go back into the work force.

There are over 40 million self-employed small businesses in the US today and they are the backbone of our country, we can'' be outsourced to a 3rd world country and we do so many of the small programs that are not beneficial for major corporations to do in house.

Obamas taxes and regulations will put us all in the poor house, he will be the worst thing that ever happened to this country with his socialized medicine and Marxist market strategies and tax increases.

[kragacles]

While it is true that small businesses often mean smaller paychecks, don''t forget that many small business, espeically in the technology sector, offer their employees something big businesses do not: stake in the company.

When an employee actually owns a meaningful portion in the company, the long term benefit often far outweighs the initally smaller paychecks. And I can say from experience, it also makes everyone work a lot harder.

[wfrances]

Really a great article and very informative.

As a small business owner who is really concerned about the upcoming election. I have 10 years until I can retire but if Obama wins I see no choice but to sell my business and go back into the work force.

There are over 40 million self-employed small businesses in the US today and they are the backbone of our country, we can'' be outsourced to a 3rd world country and we do so many of the small programs that are not beneficial for major corporations to do in house.

Obamas taxes and regulations will put us all in the poor house, he will be the worst thing that ever happened to this country with his socialized medicine and Marxist market strategies and tax increases.

[publicity1]

This is one of the best stories I''ve watched on the election. As a small business owner myself, your report nailed the issues. You demonstrated the struggles and challenges faced by so many of us. I thank you for your thoughtful coverage. I appreciate you restraining from ''dumbing down'' that so many networks and cable operations have succumbed to. Thank you, CBS. You should be commended. Excellent, excellent! Keep up the good work. There''s so much at stake in this election and I''m voting my wallet. You showed how each candidate''s plan will affect small business owners. Now my choice is even clearer. Thank you!