Small Businesses Shoulder Burdens

Submitted by ASO member: Tom Sullivan

Today, President Obama announced some of his plans to help small business. It will be difficult to distract people from pouring over NCAA tournament brackets, but it is worth directing some attention to how the President approaches the sector which we are all counting on to rescue our economy.

Well before newspapers were carrying news of the economic collapse, large companies were shedding jobs and out of the wreckage grew newly self-employed entrepreneurs. This is not a description of some job-layoff silver lining. Rather, it is a statement of what employment data show over the past several years. Now that small and large businesses alike are deep in the trench of an economic recession, the national focus is appropriately how to climb out.

Small businesses have rescued the economy from past recessions. Entrepreneurs grow businesses through innovation, ingenuity, creativity and unbridled energy. Businesses grow as entrepreneurs succeed. As small business goes, so goes the economy. My advice to the President is to carefully examine what policies stimulate entrepreneurial activity and what policies stifle that activity. And, I advise, go full steam ahead with the policies in the “stimulate” category.

Health care and taxes should be the top two issues of focus for President Obama as he details his plans for the entrepreneurial sector. Small businesses will applaud a concentrated effort to address costs when re-shaping the health insurance system. The top question that needs to be answered is, “how do we make it easier for small employers to provide health insurance?” On taxes, the President should acknowledge that the more cash small business has, the more likely those profits will result in new hires. Postpone the rhetoric of “tax the rich” until those wealthy employers hire more people.

Next, I advise the President to focus on how government agencies treat entrepreneurs. Small businesses shoulder a disproportionately high percentage of regulatory burden compared to their larger business competitors. The cost of keeping up with the massive amount of federal rules, regulations, standards, guidance, filings, reports, and permits is 45 percent more for very small businesses compared to businesses with 500 or more employees. Federal regulatory costs for small businesses total $7,647 per employee per year. On a per-household basis, this cost exceeds the cost of healthcare. The President’s small business plan should start with a pronouncement that his White House will hold regulatory agencies directly accountable to small businesses. He can do that by adding a small business empowerment section to President Clinton’s executive order on regulatory planning and review. The small business section should stop federal mandates that unnecessarily stifle entrepreneurial growth and should encourage regulatory actions that unleash the economic potential of small enterprise.

Obama Tax and Small Business

There is a significant problem with the President’s budget proposal to raise taxes on small business owners who earn more than $250,000. Unfortunately, this approach reflects a misunderstanding of how small business operates and how important they are to this country’s economic recovery. High income small businesses are the ones who will be hiring new employees, investing their profits to expand, and starting new ventures. The question should not be on whether the President’s proposal impacts 2 percent or 8 percent of small business. The question should be on whether it is wise to further burden the sector we are counting on to rescue our economy. When our economy is in dire straits, the last thing we want to do is curtail successful small businesses from growing. When our economy is at full strength we can have a debate over what the “fair share” of tax burden should be, but now is the time to encourage successful entrepreneurs to hire, expand, and create new ventures.

Submitted by ASO member: Tom Sullivan

Stimulus Bill to Small Business: Drop Dead

Remember America’s small businesses? They’re the ones who have served as the reliable job engines for our economy during the past several years but have been ignored in the President’s stimulus bill. In America’s modern history, small businesses have led America’s job generation machine. Fortune 500 companies haven’t actually grown jobs during the last decade and instead have garnered worse press than a Bernie Madoff telethon. Layoffs, hiring freezes and poor leadership have denied job gains to most of the blue chip companies – the same companies with their hands out to the Feds.

Over the past decade, small businesses have created well over half of net new jobs on a per capita basis. Small businesses are more innovative (based on patents) and small businesses have been leaders in technologies that have led to breakthrough discoveries. Those are facts that have been conveniently forgotten in this stimulus bill. We can correctly surmise why this is so – the uber unions who bet big on an Obama administration weren’t in the game for laughs – they went in up to their necks and are now expecting a return on their investment.

In large part, small business owners themselves are to blame for being left out of the biggest payoff to liberal interests in several decades. When you’re cutting the tall trees, you don’t bring an ax – you grab the biggest, meanest chainsaw you can find and have at it like the unions have done. You organize and raise money – you contribute large sums of that money to the candidate or party you think can best represent your interests. It speaks to the lean, mean types of operations that describe most small businesses that they just don’t have extra cash to buy influence – they’re too busy meeting payrolls and funding their own innovations.

Not one member of the senior staff currently working in the West Wing has ever held a for-profit job, signed a payroll check or owned a business. Both aborted picks for Commerce Secretary (of all the jobs!) weren’t business people, unlike their immediate successors. The recent nominee (no surprise) hasn’t a business background. These bits of troubling information make you wonder what they’ve been smoking over at the U.S. Chamber, which merrily endorsed most of candidate Obama’s development agenda. A small ray of hope amidst this business recovery amateur hour is the President’s pick to head the Small Business Administration. A successful venture capitalist, she will have her hands full working within this administration.

America’s hangover on the morning after this spending binge is shaping up to be a real beauty. Mardi Gras in the Big Easy should have so much wanton debauchery. Unfortunately, guess who gets to hose down the gutters and clean the streets after the party is over? The clean-up crew will be our kids and grandkids, deprived of their opportunity to grow small business in a political climate that only favors big unions and their big money.

Submitted by ASO member: Matthew E. Crow

Earth to Senators: Think of Small Business

Okay, so the House passed a bill that seems pretty unlikely to provide
anywhere near the stimulus the economy needs - and might do long-term
damage in terms of government growth and spending. Principled
Republicans and Democrats voted against it. Fine.

So now we (the people and our economy) need the Senate. We need them to
do the right thing. Pretty badly. We need them to remember that small
businesses generate 60 to 80 percent of net new jobs. The small-business
provisions in the current "stimulus" bill need to be greatly expanded..
Help for small firms - in the form of tax relief, increased expensing,
etc. - should crowd out a good deal of the muck in the current bill that
is just spending, not stimulus.

I implore the Senate: please don't screw around on this. Help the job
creators!



Submitted by ASO member: Self-Employed in Virginia

Small Business First

You know the old saying "women and children first" – used on sinking ships? I’ve got a new one for these very tough and unpredictable economic times: "small business first!"

I'm not going to comment on big business, but I know that "business" is never a dirty word if it has "small" in front of it. Small businesses are innovators and, collectively, are actually the nation's largest employer. It's bad for the economy when small business is forgotten or gets the short end of the policy stick.

On sinking ships, women and children were saved first because they embodied the future. The same goes for small business. When small business thrives, so does the American economy. Let's call for them to be at the top of the economic agenda!

Submitted by ASO member Jean Card