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Hillary Clinton 2016 Presidential Campaign

Clinton unveils plan to boost small businesses

Paul Davidson
USA TODAY
Democratic presidential candidate Hillary Clinton on Tuesday unwrapped her plan to bolster small businesses.

Democratic presidential nominee Hillary Clinton on Tuesday unveiled a sweeping plan aimed at boosting small-business start-ups and growth in a move that targets both a key voting bloc and an engine of the economy.

She says her proposals would make it easier and less expensive for small businesses to launch, access financing, file taxes and offer health care to employees, among other benefits.

On a conference call with about 500 small-business owners, Clinton noted that her father owned a drapery fabric plant and said she’s seeking “common-sense policies that make life a little easier” for the firms. “I actually think you’re the unsung heroes of our economy.”

The nation’s 28 million small businesses, broadly defined as those with fewer than 500 employees, account for 54% of U.S. sales and create about two-thirds of new jobs, according to the Small Business Administration. The firms also represent a powerful and sought-after group of voters.

Clinton's economic plan: A reality check

"At first glance, Secretary Clinton's small-business proposal hits on some key issues, namely tax complexity, a major problem for small businesses," says Molly Day, spokeswoman for the National Small Business Association (NSBA).

But at least one leading small-business group, the National Federation of Independent Business, reacted coolly to the blueprint, saying it doesn’t lower tax rates. Republican Donald Trump has called for cutting the personal tax rate that many small firms pay to 15% from as much as 39.6%.

"On the one hand, we're pleased that the secretary is focused on small business,” NFIB media director Jack Mozloom says. “On the other hand, this is a basket of essentially small ideas that aren't a substitute for real tax reform that lowers rates and eliminates complexity."

Clinton’s plan would:

• Make it easier to start a business. Citing licensing and other burdens, Clinton’s campaign says it takes longer to start a business in the U.S. than in countries such as Canada or Denmark. She wants to provide federal funding to states and localities that streamline programs to offset lost licensing revenue and “support innovative programs.” She also would work with states to standardize licensing requirements and provide training to 50,000 entrepreneurs and small-business owners in underserved communities.

• Improve access to financing. In 2012, small-business loans made up 29% of all bank loans, down from 51% in 1995, according to the Clinton campaign. She plans to streamline regulations for community banks and credit unions that face a thicket of new rules as part of the Dodd-Frank financial overhaul. Clinton also proposes allowing entrepreneurs to defer student loan payments with no interest while they’re getting their enterprises up and running. And she wants to provide tax breaks for small-business investment and expand the Small Business Administration loan guarantee program.

Trump and Clinton on the economy: A breakdown

• Simplify tax filing. A new standard deduction similar to what’s available for individual filers would eliminate the need to track transportation, computer and other office expenses. About 4 million small businesses with less than $1 million in gross revenue would be able to file even more simply. And those with less than $25 million in income could use a “cash accounting” method that also provides tax relief. Firms also would be able to write off up to $1 million in new investments.

• Simplify and expand a health care tax credit. The credit, which is part of the Affordable Care Act, would be broadened to more employers, including those with fewer than 50 employees — which are not required to provide coverage under the law. The NSBA's Day, however, says that with health care costs rising rapidly, a temporary credit may not be enough to spur many of the smallest businesses to offer health coverage.

• Make it easier to do business with the federal government. She says she’ll improve online services and guarantee a 24-hour response to businesses with questions about regulations and access to capital, among other ideas.

• Help small businesses fight large company deadbeats. Clinton says she’ll improve oversight of large firms that stiff the small businesses that are their suppliers.

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