As the Ford Motor Company prepares to cash its first multi-billion dollar corporate welfare check and hand part of it over to the union, it’s easy to forget that almost exactly a century ago, this multi-billion dollar behemoth with 240,000 employees was just another young small business with big dreams about to launch its next product.
While many small businesses fail, including Henry Ford’s first two attempts, a precious few survive, thrive, and then change the world, creating hundreds of thousands of jobs in the process. Just about all of the great American companies were once mere dreams in the mind of an entrepreneur. Microsoft, Apple, Intel, McDonald’s, and WalMart are but a few examples.
The ability to start a small business and grow it into a much larger enterprise is the greatest wealth creation opportunity in America. Studies have shown that 2/3 of all millionaires are small business owners. Entrepreneurs and their children and grandchildren make up almost the entire Forbes 400 list of richest Americans.
If small businesses are the economic engine that creates jobs, builds wealth, and makes the American dream possible, then naturally our new president plans to support and rely upon them and give them everything they need to pull us out of the economic slump, right? Well, no.
Small businesses are facing the most hostile climate in a generation, and it is not just the slumping economy and credit crunch. With the quiet scrapping of the $3,000 job creation tax credit — which was “never set in stone” according to a senior Obama adviser – there is no more small business tax relief on the horizon. (Clearly, campaign pledges are only valid if chiseled into tablets, Ten Commandments-style.)
Instead, American small businesses face not only tax increases on individual income, dividend income, and capital gains as the 2003 tax cuts expire, but new environmental fees and regulations, health care “pay or play” mandates, and a significant expansion of new “rights” for workers that may well include compulsory unionization. The entrepreneurs we are counting on for future economic growth have only higher expenses and reduced flexibility and opportunities to look forward to.