3 Very Specific Things a ‘Small Business President’ Should Do
(This post originally appeared on Inc.)
Last week, Hillary Clinton made news saying she wanted to be the “small business president.” She visited with and talked to small business owners from New England to the Midwest, joined LinkedIn, and even gave control of her Twitter account to a small business owner.
Can you blame her? There are between 20-30 million small businesses in the U.S., which is not an insubstantial block of voters. Many of her fans are happy to see her come out in support of small business. Some of critics say she’s just pandering for votes. I’m just glad to see small businesses getting the attention we need. And it’s likely that more presidential candidates will follow Hillary’s lead.
Politics aside, what exactly does it mean for someone to be a “small business president?” I’m not so sure business or managerial experience is required, but it certainly helps. What’s essential, however, is addressing issues in Washington that specifically impact the profitability of companies like mine. We are not looking for general, sound-bite rhetoric like “reducing regulations” or “creating an environment for growth.” We want specifics from a “small business president.” We want details. We want…
Tax Reform. By now we’re all familiar with the tax code’s complexities and those “evil” big companies who have the audacity to want to legally reduce their tax liabilities by parking cash outside of the U.S. in countries with lower rates. The fact is that federal tax rates in this country are high. Maybe not as high as some periods. But that comparison is irrelevant in 2015.
Why? Because the tax conversation is incomplete without including a key element: our state, local, sales and other taxes (real estate taxes, school taxes, highway tolls, wage tax, permits, airport fees, franchises taxes, and all the other ways local governments generate their revenue). When these are taken together, my total tax bite is easily in excess of 40 percent of what I make. This is money not being invested in my business and not being used to hire more people.
A true “small business president” would make it her/his number one priority to make the U.S. one of the, if not the, least expensive countries in the world to operate from a tax perspective. That means simplicity and lower rates at both the federal and local level. Period. Besides lowering the burden on domestic corporations, the next president should aim to attract more companies here from overseas so that they can hire people and generate indirect work for the small businesses that always support larger companies.
Deficit Reduction. Remember the headlines just a few short years ago during the days of our “Great Recession” and enormous government stimuli? Now, talking about our deficits and national debt is a good way to kill a conversation with boredom. But this is a conversation that needs to be revived, and quickly, because it’s so important to small business.
Our national debt is now at $19 trillion, and that’s just our federal debt. Our total financial debt is at $58 trillion, which is 13 times the size it was in 1980. Our deficits are at half a trillion a year and are projected to be back in the trillion-dollar range in the next few years. No one seems to know the impact. Can the U.S. continue to generate huge deficits and debts forever? Or will there be a time when the bills have to be paid, causing large sequestration coupled with tax increases? Will our debt become so large that our financial markets collapse under its weight? Will we be unable to finance future expenditures for wars, disease, or national security issues? A “small business president” would use our current economic growth to form a long-term deficit reduction plan that would give more clarity to the government’s direction and take away the huge amount of uncertainty that’s holding back many of my small business clients from investing.
Expanding the Small Business Administration. I’ve seen SBA chiefs come and go and the current head, Maria Contreras-Sweet, is in my opinion the best ever. Sweet is a financer and an excellent and tireless communicator. She has made great progress in getting money into the hands of small business owners through the administration’s many loan and grant programs.
A “small business president” would recognize this woman’s skills and give her the opportunity to do more. I’m no lover of bigger government, but this organization is operating way below its potential. The SBA should not just be a financing arm, it should be also be the customer service resource for all small companies on any federal government issue, question, or problem. This means taxes, contracts, loans, regulations, access to capital, and access to decision makers. Give us a toll free number to call whenever we have a concern, any concern, with Washington. And put trained people on the other end of the line, like any customer service organization, who can qualify our calls and direct them to the right person or department for answers.
There’s talk and there’s action. Right now we hear talk. In 2017, when the next president is inaugurated, small businesses would love to see some action. And a truly “small business president” would act on the three specific things I’ve listed above.