Super Tuesday has come and gone, but there’s still a long way to go before the presidential nominees are selected.
What does all of this mean for small businesses? It’s not all that clear given we haven’t heard too much about small business on the campaign trail or in the debates. And some might ask: Why should we care about what the candidates say about small business? Quite simply, entrepreneurship and small businesses are critical sources of innovation, economic growth and job creation in the United States. If we want a strong economy, we need robust entrepreneurship. Unfortunately, that simply hasn’t been the case over the past decade.
Even if campaign rhetoric were running high about small business, that doesn’t necessarily mean anything positive from a policy standpoint. Does the candidate propose, support and truly believe in a pro-small business agenda? Has the candidate been consistent on these issues over the years?
Here’s a quick list of issues critical to small businesses that should be checked against where each candidate stands. These are straightforward, sound policy measures that fall under four broad categories and provide a strong foundation for economic growth.
The U.S. needs to make both its personal and corporate tax systems competitive and more pro-growth. That means lower tax rates, eliminating taxes on capital gains and assets at death and allowing expensing for capital investments. Given the notable tax increases that have occurred during the Barack Obama years, tax relief — beyond mere revenue-neutral reforms — is needed. Moreover, tax reform needs to simplify the tax code because the cost of compliance is especially burdensome for small businesses.
No one better understands the real and substantial costs of regulation than small business owners. They’re on the front lines of compliance. The burdens of regulation fall most heavily on small businesses, as has been shown in assorted studies over the years. A comprehensive effort focused on regulatory reform and relief should include sunsetting rules and regulations so Congress is required to re-evaluate regulations after a certain period of time, requiring that rules and regulations be subject to votes in Congress before being finalized, more accountability to ensure regulatory agencies fulfill their requirements under the law when it comes to assessing small business effects, following through on reducing burdens or considering alternatives, establishing a regulatory budget to provide an accounting of the annual costs and benefits of federal regulations and setting up a truly independent entity for Congress to evaluate the costs and effectiveness of regulations.
Reducing governmental barriers to trade — such as tariffs, quotas, and regulatory obstacles — and strengthening intellectual property rights and enforcement internationally are essential to enhancing opportunities for U.S. entrepreneurs, small businesses and workers. According to the U.S. Census Bureau, small and mid-size businesses in the international trade arena in 2013 made up 97.7 percent of exporters, 97.1 percent of importers and 94.4 percent of firms that both export and import. Trade has become vital to U.S. economic growth, From 2000 to 2015, the growth in U.S. exports equaled 22.5 percent of growth in real gross domestic product. The expansion in real total trade came in at 41.6 percent of real GDP growth. The U.S. needs to reclaim its leadership role in terms of advancing free trade, including the Trans-Pacific Partnership accord, Transatlantic Trade and Investment Partnership with the European Union and a free trade area for the Americas.
Total federal outlays jumped dramatically from 2007 to 2011, with the biggest leap coming in 2009. In both 2012 and 2013, outlays actually declined and grew only 1.4 percent in 2014. But in 2015, federal outlays increased 4.9 percent.
Looking ahead, the Obama budget points to big spending increases in coming years. Those are likely to be underestimated given the ugly spending realities of ObamaCare and assorted “entitlements.” Draining more and more resources from the private sector through taxes or debt for increased federal government spending works against economic growth. It promises to get worse in coming years without serious efforts to rein in government.
Federal government policies thwart entrepreneurship and investment. We’ve all paid the price in terms of lost entrepreneurship, investment, economic growth and jobs.
Any presidential candidate serious about getting this economy back on track must be willing to step forward and support entrepreneurship and small business — not through mere rhetorical flourishes or dubious government programs, but by laying out a policy agenda that consists of tax and regulatory reform and relief, advancing trade and global opportunities for growth and reining in the size and scope of government.