NSBA Reaction to State of the Union AddressJanuary 25, 2011
Two overriding themes permeated President Barack Obama’s State of the Union Address tonight; innovation and entrepreneurship. From broad, patriotic rhetoric to specific proposals, Obama’s comments underscored both the founding principle of innovation and entrepreneurship in the American dream as well as their importance to today’s economy.
“Innovation is what we do. Small firms produce five times as many patents per revenue dollar as large companies and 20 times as many as universities,” stated Larry Nannis, NSBA chair and shareholder at Levine, Katz, Nannis + Solomon, P.C.. “We applaud the president’s commitment to innovation and look forward to joint efforts ensuring the continued success of programs such as the Small Business Innovation Research program.”
In addition to his urging enhanced investments in innovation, Obama acknowledged the need to address existing problems in the government such as regulatory burdens and the complex tax code—two major issues NSBA’s members raise continually. His urging to reduce the corporate tax rate is a positive step, but it cannot be done in a vacuum—broad reform of the entire tax code is necessary, not just for corporate entities. The overwhelming majority of small businesses are pass-through entities and therefore pay business taxes through their individual income tax. Allowing the smallest businesses to pay a much higher tax on their business income than a multinational, multi-billion corporation undercuts any semblance of fairness.
One of the key messages Obama delivered specifically to the small-business community was a clear signal of his support for repealing the expanded 1099 reporting provision included in the health care law, stating, “We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.” He also signaled a willingness to address other aspects of the health care law, including stronger medical malpractice reforms.
“I am pleased that the President tonight underscored the important role small business plays in every aspect of the U.S.,” Todd McCracken NSBA president and CEO. “Given the very early stages of economic recovery the small-business community is just now seeing, this kind of strong commitment to a thriving small-business community is critical.”
NSBA is committed to working with policymakers to ensure that these good intentions are converted to real action on behalf of the nation’s struggling small businesses.
Please click here for information on NSBA’s State of the Union Issue Briefing.