Touting a message of change throughout a marathon campaign, Barack Obama was elected the 44th president of the United States on Tuesday in a decisive and historic victory. And while small-business owners and advocates cheer the economic stability and confidence an election outcome may bring, many remain wary of the president-elect's tax proposals and the long-term direction of the economy.
Small-business owners and advocates are hailing the election of Sen. Barack Obama as the nation's 44th president, saying his sweeping victory could bring a measure of stability back to the economy and restore confidence among smaller employers.
Still, many remain wary of his tax proposals and their impact on costs for small businesses.
Voters on Tuesday not only put the nation's first African-American chief executive in the White House, but they also redrew the electoral map by giving Democrats control of the White House, the Senate, and the House of Representatives for the first time since 1995.
In a drawn out battle with his Republican rival, Sen. John McCain, for the small-business vote, Obama pledged to cut taxes for small businesses earning less than $250,000 after expenses, while raising taxes on capital gains and dividend income among wealthier Americans. In a nod to entrepreneurs, Obama promised to exempt start-ups from paying capital gains taxes, lower the tax rate for the self-employed, and boost government investment in R&D.
Among other health-care initiatives, Obama also vowed to give small businesses a tax credit to offset rising health-care premium costs, which employers have consistently cited as a top business concern. On the global trade front, he has demanded strong environmental and labor protections as a key element of any U.S. trade agreement, and advocates renegotiating NAFTA to boost those protections.
"Political certainty will bring some sense of stability to the financial markets," said Karen Kerrigan, president of the Small Business and Entrepreneurship Council, a Washington-based lobby group. "A rest from the severe market turbulence will likely ease consumer and investor anxiety to a certain extent. This is a welcome break for entrepreneurs."
Kerrigan cautioned, though, that total economic and market certainty will not return overnight and that Obama's economic agenda will take time to have an impact.
She also worried that some Democrats might want to expand his tax increases, especially for higher-earning small businesses, while others in his party have openly questioned the wisdom of raising taxes for anyone during a rocky economic period.
"It will be interesting to see what side will win out," Kerrigan said.
"Undoubtedly, the next year, or possibly even the next few years, will be difficult times for small businesses regardless of who had won the election," said Mike Handelsman, the general manager of BizBuySell.com, an online marketplace for small businesses.
Handelsman said the cataclysmic events of recent months spurred by the subprime mortgage crisis will take several quarters to work their way through our economy.
"Small businesses, which often have little financial cushion to rely on during down business cycles, will find these times challenging as consumers reduce spending on goods and services," Handelsman said.
Andrew Sherman, a small-business policy expert at Dickstein Shapiro, Morin & Oshinsky, a Washington-based law firm, said he was not an Obama supporter during the campaign, but was now eager to move forward.
"As a citizen, he has my commitment, my hopes, and my prayers that we all do whatever is in our power to protect our nation's entrepreneurs and recognize them for what they really are -- the fuel for our country's economic engine," Sherman said.
Will the Ledbetter Law affect your business?
No, I already hang on to all my employee paperwork and I pay workers fairly.
Yes, I'll have to keep employee paperwork longer and be more detailed.
Yes, I'm being sued.
What do you think of President Obama's decision to increase federal dollars for embryonic stem cell research?
I don't approve.
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