Small Business Top 10 Policy Wishes
Well, it’s National Small Business Week. That means lots of people who normally don’t care about business owners, or might even give our nation’s entrepreneurs a hard time, will say nice things about small business. A variety of politicians come to mind.
But let’s put our elected officials to the test. Following is a top 10 policy wish list that would provide real help to the small businesses in this nation that invent, innovate, generate economic growth, and create the bulk of new jobs.
1. Make Pro-Growth Tax Cuts Permanent. The 2003 reductions in the personal income, capital gains and dividend tax rates, along with expanded expensing of capital investment for small businesses, have provided big boosts for small business and the economy. These tax cuts should made permanent, and quickly.
2. Immediate Repeal of the Death Tax. Death taxes make no sense. They are inefficient revenue collectors, discourage investment, often destroy family businesses, and are based on nothing more than envy. The death tax, which is scheduled to be phased out by 2010, but then returns in full, destructive force in 2011, should be repealed immediately and permanently.
3. Health Care Market Reforms. Some like government involvement in health care, despite the fact that this only means higher costs and reduced access to quality care. Instead, market-based reforms are needed, including expanded tax incentives for health savings accounts; passage of the “Health Care Choice Act” that allows consumers to shop in any of the fifty states for their health coverage needs; and the establishment of Association Health Plans, which address the issue of state mandates by allowing small business purchasing plans to operate under a uniform set of regulations.
4. Social Security Reform. Social Security needs fixing for various reasons, including a long track record of tax increases, potential future fiscal instability, the lack of ownership in the system, and dismal rates of return. Allowing younger individuals to take part of their Social Security taxes and deposit that money in a savings/investment account makes practical and sound financial sense.
5. Regulatory Reform. Government over-regulation hits small firms hardest. A wide array of regulatory changes are needed, including rolling back assorted costly mandates and rules. But a sound fundamental reform would be to require that Congress vote on all agency rules before they are imposed on the public.
6. Tax Reform. After the 2001 and 2003 tax cuts are made permanent and the report is received from President Bush’s tax reform commission, Congress must move to overhaul the current tax code in order to make it more pro-entrepreneur and pro-growth, such as by adopting a low-rate flat tax.
7. Intellectual Property Protection. Perhaps more than ever before in our history, intellectual property plays a critical role in our economy. New ideas, invention and innovation drive economic growth. At the same time, intellectual property faces great perils in terms of opportunities for theft or piracy. It is crucial that America’s entrepreneurs have their intellectual property protected here at home, and around the globe. International trade agreements must have real teeth in terms of intellectual property protections.
8. Tort Reform. The runaway U.S. tort system by some estimates costs more than 2% of GDP annually, and reduces investment, economic growth and job creation. Class action reform was a good first step, but more is needed, like limiting attorneys’ fees, capping non-economic damages, and assuring that liability s proportional.
9. Advance free trade. Free trade reduces costs and expands choices for consumers, enhances competition, and opens new markets and opportunities for U.S. businesses, particularly for small and mid-size firms. Congress should pass the Central American–Dominican Republic Free Trade Agreement (CAFTA-DR), which covers U.S. trade with Costa Rica, El Salvador, Honduras, Guatemala, Nicaragua, and the Dominican Republic.
10. Government Spending Restraint. Recent large increases in federal spending mean that valuable resources are being sucked out of the productive private sector – whether through taxes or borrowing – only to be used by wasteful government. Serious spending restraint, or preferably spending cuts, is needed.
Are there other important items on the small business agenda? Of course. They include immigration reform, greater freedom in energy markets, the preservation of stock options, and reforming the Postal Service.
In addition, from stricter CAFE standards to both domestic and international effort to reduce carbon-dioxide emissions, such proposal rely in whole or in part on the theory of global warming. However, the scientific community is split over the existence and possible causes of global warming. Meanwhile, the costs of these regulatory proposals are real and can be severe.
It’s time to move beyond the rhetoric, and make real policy changes that help small businesses. A clear commitment to make positive changes in these areas during this National Small Business Week would show substantive commitment by our elected officials to America’s hard-working small businesses.
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.
