While the civilized world is enamored with our young president and the less civilized world is rattling its sabers, small business is working to bring the economy back. The old phrase “You can run but you can’t hide” sums up the truth about our president’s European trip. He can try to get away from the economic problems, but he can’t hide from them. With talk of trips to Russia and China later this year with his 500-member staff in tow, when will we get down to (small) business?
Most of us work for companies with 50 or fewer employees, and most of the new jobs over the last decade have come from small businesses. No one is going to say small business is “too big to fail.” Remember the “dotcom bubble” of the late 1990s? Are all the dotcom businesses gone? Some of them are, but the online world of shopping, banking, and living has not decreased or gone away; it has grown. Booms and busts in the market exist for a reason: to clean out the dead wood and to make way for new opportunities.
There’s been a great deal of focus on GM, Chrysler, and AIG, and with the investment of billions of taxpayer dollars there should be focus. However, you don’t jumpstart an economy with declining industries. You jumpstart the economy by making government get out of the way, lowering taxes, and simplifying regulation.
A few weeks ago, Treasury Secretary Tim Geithner unveiled the administration’s plan to boost small business and insisted relatively few small business owners would be affected. Geithner told Congress (subscription required) in one of his many appearances, “Now, I just want to pause here for one second, those proposed changes in tax rates would apply to only 2 to 3 percent of small business owners across the country, only 2 to 3 percent. Ninety-five percent of small-business owners … have incomes below that threshold of $250,000.“
This seems like a logical enough statement, but you have to look deeper to discover the truth. Most small business owners pay taxes on their profits by filing their taxes on the standard 1040 form. In addition, most of these family-owned business incomes fall well under the Obama administration’s $250,000 per year benchmark. If the small business policies are instituted as proposed, most of these families will pay more taxes, not less. In addition, these small businesses are the ones creating jobs, even now in this economy. If Obama’s business policy is passed and signed into law, it will take money out of the small business sector, cost jobs, and shrink investment.