The day before President Barack Obama presented his jobs bill to the nation, which was September 19, 2011, two bipartisan Congressional sponsors proposed legislation to create rural jobs that should become part of any package advanced by the U.S. Congress. That's the opinion of John Crabtree, of the Center For Rural Affairs at Lyons, Nebraska. He provides the following explanation and observations.
Introduced by Representatives Wally Herger (R-CA) and Ron Kind (D-WI), the Rural Microbusiness Investment Credit Act of 2011 (H.R. 2858), would help new enterprises start and existing enterprises grow by providing a 35% tax credit on up to nearly $30,000 of new investment.
"Communities across Northern California have struggled for years with high unemployment," says Herger. "The Rural Microbusiness Investment Credit Act, if it becomes law, will help these communities recover and put forth a policy that will promote job creation in rural communities. The real answer to our economic problems is bolstering our entrepreneurs and small businesses so that they may begin to grow again and create jobs."
Small businesses can help answer our economic problems
According to Representative Kind, small businesses are creating jobs across the country in this tough economic time, especially in rural communities. However, small business incentives and tax credits often leave out smaller, rural micro businesses.
"Small businesses are the backbone of our economy and critical to our way of life in rural states," says Kind. "We must provide the support they need not only to keep their doors open but for new start-ups to get up and running. This bill will not only provide our small businesses much needed investments to hire and grow, bringing new jobs to our communities, but also help entrepreneurs get the capital they need to get off the ground and start contributing to local economies."
"We applaud Representatives Herger and Kind for introducing this legislation at such a crucial time," says John Crabtree of the Center for Rural Affairs. "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."
Beginning farmers and ranchers would also be eligible
According to Crabtree, 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 would work in good years and bad, for new or established small businesses," says Crabtree.
Crabtree explains further that during recession, large business reluctance to add workers makes small businesses and self-employment even more important to economic recovery. During the 2000-2003 recession, microenterprise employment grew by 9% nationally, while larger firms were still shedding jobs.
"America faces stern economic challenges. Rural America's entrepreneurs can help find solutions to those challenges, but they need support from Washington, and they deserve it just as much as big business," Crabtree concludes.
Established in 1973, the Center for Rural Affairs is a private, non-profit organization working to strengthen small businesses, family farms and ranches, and rural communities through action oriented programs addressing social, economic, and environmental issues.