Our friends over at the Center for Rural Affairs have a spot-on post about small business in rural America. We felt like this article was well worth sharing because of the positive implications of a new tax credit designed to accelerate job creation on a much smaller scale.. Do you agree – should we be spending more time and resources on small business?
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Small Business is Big in Rural America
By John Crabtree, johnc@cfra.org, Center for Rural Affairs
America faces stern economic challenges. Rural America’s entrepreneurs can help find the solutions to those challenges, but they need support from Washington, and they deserve it just as much as big business.
During recession, large business reluctance to add workers makes small businesses and self-employment even more important. During the 2000-2003 recession, microenterprise employment grew by nine percent nationally, while larger firms were still shedding jobs.
The day before the President presented his jobs bill to the nation, Representatives Wally Herger (R-CA) and Ron Kind (D-WI) introduced the Rural Microbusiness Investment Credit Act, which would help entrepreneurs start new businesses and expand existing enterprises by providing a 35 percent tax credit on up to $30,000 of new investment.
Owner-operated businesses with up to five employees would be eligible if located in a rural area with significant population loss, low average incomes, high poverty or high unemployment. Beginning farmers and ranchers would also be eligible. Qualifying businesses could receive refunds from prior years if not making enough in the current year to owe taxes, which is critical during tough times or start-up when most are lucky to break even. A refund of prior years’ taxes is an investment incentive that works in good years and bad, for new or established businesses.
This tax credit is exactly what rural America needs. It would create jobs and genuine economic opportunity for the little guys that have long been the backbone of the rural economy.
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