Obama: Tax Breaks Eye Small-Biz Owners ‘on the Fence’

President Obama today signed into law a jobs bill offering tax breaks that he said would particularly help struggling small business owners who are “on the fence” about hiring an additional worker or “anyone at all.”

With a ceremony in the Rose Garden, the jobs incentive bill became law after the Senate passed the measure with a 68 to 29 vote yesterday. The legislation provides nearly $18 billion in tax breaks and pumps about $20 billion into highway and transit programs.

Many business groups and economist have said the tax incentives would only create an estimated 250,000 jobs, a figure that pales in comparison with the more than 8 million jobs lost over the past 18 months.

The law provides an exemption for businesses from the 6.2 percent payroll tax based on new employees who had previously been jobless. Employers would also get a $1,000 tax credit if those new employees stay on the job for one year.

“This tax cut will be particularly helpful to small business owners,” Obama said today. “Many of them are on the fence right now about whether to bring in that extra worker or two, or whether they should hire anyone at all. And this jobs bill should help make their decision that much easier. “

Obama also stressed a provision in the bill that would encourage small businesses to grow and hire new workers by “permitting them to write off investments they make in equipment this year.”

The legislation allows the kind of write-off that typically can take years to depreciate, Obama said,

“But under this law, businesses will be able to invest up to $250,000, let’s say, in a piece of factory equipment, and write it off right away. Put simply, we’ll give businesses an incentive to invest in their own future — and to do it today,” Obama said.

Obama, however, stressed that the jobs bill is by “no means enough” in solving the recession’s high unemployment and the limited availability of credit to small businesses.

Democrats are preparing a separate proposal to re-direct $30 billion in federal bailout funds into community banks to bolster small business lending. The president has also proposed a 21 percent increase in the Small Business Administration’s budget to boost loan guarantees and generate more “early-stage” small business financing. 

According to a recent survey by the National Federation of Independent Businesses, the top concerns of small business owners are: weak product demand; high taxes and uncertainty about future assessments; and problems in obtaining credit.