Comment on FR Doc # E9-25416

I support the proposed change to 124.104 paragraph (2) to exempt funds in IRAs from the calculation of net worth. The current policy to include IRAs is biased in favor of former government employees and others who are fortunate enough to have a pension from a prior employer. Former government employees have a pension they can rely on in their retirement years. For most people, however, this is not the case and responsible individuals diligently set aside money each year in an IRA to fund their future retirement. The current policy is biased in favor of former government employees by not counting the present value of their pension, while counting the value of the IRA that everyone else must use. I support the proposed amendment to 124.104 paragraph (c)(2) to exempt income from an S Corporation from the calculation of both income and net worth to the extent such income is reinvested in the firm or used to pay taxes arising from the normal course of operations of an S corporation. Payment of S corporation taxes is mandatory and the business owner should not be penalized for taking distributions to cover those tax payments. The SBA should concern itself with money the business owner is actually taking home – not distributions received for the purposes of paying taxes. While I am not opposed to pay limits for 8(a) business owners, the requirement that the business owner be the highest paid person in the company creates a need to increase the business owner’s pay. Our company performs highly specialized work. To recruit and retain the key employees I want, we must pay very high wages. This creates a catch-22 situation, as the CEO must raise her salary when highly compensated people are recruited in order for her compensation to be greater than anyone of her employees. If the SBA wants a strict cap on business owner salary, it should relax the requirement that the business owner be the highest paid person.