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 businesses’ reluctance to add workers makes small businesses and self-employment even more important. During the 2000-2003 recession, microenterprise employment in Wisconsin grew by 6 percent, while larger firms were still shedding jobs.
The day before the President presented his jobs bill to the nation, Representatives Ron Kind, D-Wis., and Wally Herger, R-Calif., 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.
John Crabtree is with the Center for Rural Affairs.