Among the items in last month’s “Tube Talk” e-newsletter was one about Leonard Maniscalco, who owns Sackett Systems Inc., Bensenville, Ill. This small-business owner wants the government to give him a $1.3 million grant. In return, he’ll create 150 new jobs.
According to Chicago Tribune columnist Greg Burns, who wrote about Maniscalco’s quest for government funding, “If the idea sounds pie-in-the-sky, or maybe just batty, consider how the government expects to lose $30 billion on its investment in General Motors and Chrysler. By that score card, 150 jobs for $1.3 million would be a steal.”
Maniscalco’s request for a handout might be a bit of a stretch, but funds could become available for small businesses. In his January 27 State of the Union address, President Obama called for a new jobs bill and stressed how America’s businesses will always be “the true engine of job creation in this country.”
Obama said that “government can create the conditions necessary for business to expand and hire more workers. We should start where most new jobs do, in small businesses, companies that begin when an entrepreneur — when an entrepreneur takes a chance on a dream or a worker decides it’s time she became her own boss.
“Through sheer grit and determination, these companies have weathered the recession and are ready to grow. But when you talk to small-business owners in places like Allentown, Pennsylvania, or Elyria, Ohio, you find out that even though banks on Wall Street are lending again, they're mostly lending to bigger companies. Financing remains difficult for small-business owners across the country, even though they're making a profit.
“So ... I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat.”
Obama proposed a new small-business tax credit for those who hire new workers or raise wages and called for eliminating all capital gains taxes on small-business investment and providing a tax incentive. He also called for a tax incentive for businesses of all sizes to invest in new plants and equipment.
Obama reiterated his proposals at a town-hall type event in Nashua, New Hampshire, where he said, “"Jobs will be our number one focus in 2010, and we're going to start where most new jobs do -- with small businesses."
Since job creation and small business appear to be the front-burner concerns, these proposed measures likely have a better-than-average chance of passing. Does that mean small businesses will be lining up for handouts or loans? Maybe, maybe not, but they will certainly appreciate the tax cuts and incentives.
Commenting on whether Maniscalco’s request for a grant had merit, "Tube Talk" readers had mixed opinions.
A fabricating machinery supplier said, “Absolutely [the request has merit]! Keep the manufacturing base here from further decline so when we next go to war, we don’t have to ask that foe to sell us the needed weapons. Small businesses are the heart of the economy and the major employer. So, the government gives the money away to the failing giants. That figures. The lack of governmental understanding of the business world is readily apparent. Just look at the pronounced levels of non-experience in that segment of the economy. But, of course, we had to have a CHANGE!!!!
The majority of readers who responded did not approve of the request. One who works for a company that rebuilds aircraft engines thinks 150 jobs for $1.3 million is a steal all right, a steal from U.S. taxpayers. He wrote, “Sounds to me it’s just another person standing in line with their hand sticking out wanting something for nothing. All this is our tax money going to be a hand out. I’m still working and paying taxes and someone else reaping the rewards. I’m so taxed now I can’t stand up. I guess I should quit my job and stand around with my hand sticking out. I guess I should file for unemployment and get food stamps and anything else the government has to offer, and stay at home and wait for the checks. I’m 63 yrs. old and still working. If a person wants a job bad enough they can find one. It may not be what you want but at least you are working, trying to feed your family instead of waiting for a hand out from the government.”
Another said, “I think it's absolutely absurd for the government to be involved in the private sector like it is. Paying companies just to create jobs is ridiculous, especially when there is no one interested in, or can buy their product(s). I'm assuming this was just a joke for the government to write him a check just to create jobs, because for anyone to think this is a good idea is totally wrong! Get the government out of the way, negotiate a REAL and FAIR trade policy, lower taxes, and provide incentives for companies to create jobs, and let the companies live or die based on their talent, products, and decision making.”
Hmmm ... negotiate a REAL and FAIR trade policy, lower taxes, and provide incentives for companies to create jobs, and let the companies live or die based on their talent, products, and decision making. Makes sense to me. I wonder if this reader would like to run for office?
If you’d like to know more about the proposed plan for small-business job creation, check out this overview/opinion from Ann M. Wilkinson, a senior fellow at Harvard University Center for Business and Government and a public policy scholar at the Woodrow Wilson Center.
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