2 Ways the Election Will Affect Small Business

Economic issues are dominating the debate during this year's midterm election season. The deficit is resonating like never before. The size of government -- something that people always complain about but do nothing to fix -- has inspired a new breed of candidates who seem set on cutting government programs. Both Democrats and Republicans are promising policy changes.

So how will small businesses be effected?

First, taxes. As the last congress left this issue hanging, it will be up to the next session to decide the fate of the Bush tax cuts. The main area of contention is whether to extend tax cuts for the wealthy -- folks who make over $250K a year. But of course, these taxes don't just impact individuals. Many small businesses will get hit as well. The good news for those small businesses is that the momentum is clearly on the side of those pushing for an extension. If the GOP sweeps into power, as expected, in November, one of their key missions will be to make sure this tax isn't hiked.

The extension will only be temporary -- for a couple of years or so, whereas the cuts might be made permanent for the lower tax brackets -- but given the ongoing economic weakness, this will be helpful relief.

Next, the wild card issue: health care.

The health care reforms have never been popular, but it always seemed implausible that the GOP could actually get the bill repealed. However, now it seems possible. It won't happen right away, mind you. As long as Obama is The President, he would obviously veto any attempt to repeal the reforms. And beyond that, the GOP probably couldn't get a filibuster-proof repeal past the Senate.

However, the story doesn't end this election cycle. Suppose the GOP gets to 51 seats in November, and then has another huge election in 2012, winning the Presidency and adding to gains in the Senate. They probably wouldn't need even 60, since some Democrats would vote to repeal as well. Then we're talking about a real possibility. Throw in the outside chance that the Supreme Court overturns the individual mandate, and the odds that the reform bill is repealed or altered significantly looks not-trivial.