Small businesses know that uncertainty is the norm and the bane of their success. About the only thing that startups and entrepreneurs can really count on is the guarantee of uncertainty. One of the annual forms this constant uncertainty takes is the government’s rollback of small-business tax breaks that are retroactively restored only months later. Yet, with the dead period and the lack of certainty of the tax breaks’ returns small business owners are left standing in quicksand, uncertain of the future.
Both Democrats and Republicans acknowledge that uncertainty is perhaps the greatest challenge for the development and success of small businesses. Startups balance on a razor’s edge when it comes to success and failure. An entrepreneur who fails at their first attempt at a small business can be wrecked with bad credit and left to acquiring a merchant cash advance bad credit just to get on their feet again. The uncertainty is constant and tolling.
But, the move from temporary to permanent status for these tax breaks seems unlikely. Despite bi-partisan support for the establishment of more permanent solutions, the odds of the tax breaks navigating the House, the Senate, and meeting White House approval are slim. The White House in particular remains non-supportive of tax breaks for businesses becoming permanent without a more comprehensive overhaul of the tax code that includes working class families and other constituents.
Popular tax breaks falling into this category of temporary tax breaks include those that allow small businesses to write-off investments in equipment, machinery, and software. These breaks, of up to $500,000 can be written off at once rather than over the space of several years allowing businesses to invest in themselves immediately and potentially create more jobs.
The White House also contends that in order to enact a permanent tax break, the cost of the tax break needs to be offset by another source of revenue in order to be fiscally responsible.
Wisconsin Governor Paul Ryan, chairman of the Ways and Means Committee, encourages the bills to pass as small businesses “need more certainty to grow.”
Whether the bills become permanent or not is unclear. The uncertainty regarding the future of small business tax breaks mirrors the reality of most small businesses across the country. Uncertainty remains the certain norm in spite of bi-partisan efforts for permanent tax breaks for small businesses.
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