Obama Small Business Plan Gives Tax Break to Venture Capitalist Contributors, According to the American Small Business League

Petaluma, California, UNITED STATES


PETALUMA, CA--(Marketwire - March 17, 2009) - The following is a statement by the American Small Business League:

President Obama laid out his latest plan to purportedly help small businesses and stimulate America's faltering economy.

One provision in President Obama's new small business plan appears to be designed to benefit wealthy venture capitalist backers of his campaign more than small business owners. The new policy will exempt investments in small businesses or, as President Obama stated, the sale of stock in small businesses from capital gains taxes. This will offer little or no benefit for small business owners while saving venture capitalists billions of dollars in taxes.

The National Venture Capital Association (NVCA) and its members have showered President Obama and key members of Congress with political contributions to secure new federal legislation and policies that will benefit wealthy investors. The new pro-venture capital policies will be devastating for the nation's 27 million legitimate small businesses, as wealthy investors will be allowed to completely dominate federal small business contracting programs.

The new exemption on capital gains tax for venture capitalists is just one of several political favors the NVCA was hoping their generous contributions would buy. The real jewel in the crown for the NVCA and mega wealthy investors is a change in the federal definition of a small business. The Small Business Act defines a small business as a firm that is "independently owned." Wealthy investors are hoping their new found political clout with President Obama will allow them to replace this definition with one that includes firms that are not "independently owned," but are owned and controlled by many of the nation's wealthiest investors and even major venture capital firms.

Dropping the longstanding federal definition of a small business as being "independently owned" would allow extremely wealthy investors to hijack billions of dollars in federal contracts earmarked for small businesses. Millions of middle class jobs could be lost as legitimate small businesses battle with firms controlled by multi-millionaires, and even billionaires, for even the smallest government orders for goods and services.

President Obama could change the federal small business definition through executive order, with legislation or with an agency rule change. President Obama's appointment of Tootsie Roll heiress and multi-millionaire venture capitalist Karen Mills to head the Small Business Administration is viewed by the small business community as a very bad sign of things to come.

Contact Information: Contact: Sonia Meyer Public Relations Specialist American Small Business League (707) 789-9575