Republican National Committee Chair Michael Steele Says To Eliminate Capital Gains Tax And Lower Unemployment Tax For Small Businesses

Republican National Committee Chair Michael Steele said in an interview on Monday, December 14, that President Obama’s asking lenders to give more loans to small businesses needs to come with some incentives.

Steele stated that with the current economic state there is a high probability of small businesses, who get loans from banks, finding themselves in a position where they are unable to pay banks back and this is the driving reason behind lenders being so tight with money.

There are numerous economists and analysts who believe that unless lending becomes more available and business owners are given access to capital there will be little growth in the economy and there could actually be a slip back toward a recession.

The argument Steele and lending institutions are making is they don’t feel there is an overabundance of people who qualify for loans and even those who do are a risk in that income for many people and businesses is questionable and unemployment is still ravishing the country.

Mr. Steele suggested in his interview that incentives be offered to small businesses to help them. He suggested that an elimination of the capital gains tax and lowering the unemployment tax would go a long way in helping small businesses.

The latter suggestion has got some hot responses as lowing the unemployment tax on businesses is viewed by many to be a very foolish move since it would have employers exempt from paying in some or much of the money that goes to pay for unemployment benefits of workers who are laid off.

With the debate over unemployment benefits extension ongoing, this idea seems unattractive to many who are dependant on unemployment benefits, but seen by others as a way to allow small businesses to keep more of its gains and possibly stay afloat.

Should unemployment taxes be lowered for employers so they can keep more capital and possibly get assistance in this difficult economy or is the unemployment tax something that shouldn’t be touched?

Also, are banks justified in keeping their lending tight and not giving out loans due to the possible risk of defaults they feel from many borrowers?