by Steve Forbes
The lifeblood of the American economy is small business – that’s where most of the new jobs are created – and thus it is crucially important to determine which presidential candidate has the best record in protecting and promoting this critical sector of our economy. In doing so, we must keep in mind the fundamental role economic freedom plays in helping to grow our economy and what proposals the candidates have made to enhance our future economic freedom.
Alas, the term “economic freedom” seems little more than a sound bite to the leading Democratic candidates, who have all advocated raising taxes. But to those of us deeply committed to the free market principles that have enabled America to become the economic superpower it is today, we see it as absolutely essential to our future prosperity.
To our nation’s small business owners, “economic freedom” means the freedom to invest more of their hard-earned money back into their businesses rather than turning it over to the government to pay burdensome taxes. It means the freedom from excessive regulation that stifles ingenuity and opportunity. And it means the recognition by those constructing our economic policies that the business owner – not the government regulator – best understands the actions that will give that business the greatest possible chance of success.
Among the Republican candidates for President, any comparison of the records of former New York City Mayor Rudy Giuliani and former Massachusetts Governor Mitt Romney in the arena of economic freedom makes it quite clear who will be the better friend to America’s entrepreneurs.
When Rudy came to City Hall as Mayor of New York, businesses, just like residents, were abandoning the city. Decades of governance by tax-and-spend liberals had taken their toll on New York’s private economy – prohibitive taxes simply made the city an unwelcoming place for business owners.
Rudy changed that. Over the course of his eight year tenure, New Yorkers saw their taxes cut 23 times, saw their tax burden decrease by 17 percent to its lowest level in three decades, and saw the creation of 423,000 private sector jobs.
With regard to small business owners specifically, Rudy cut commercial rent taxes, returned hundreds of millions of dollars to small businesses via the reduction of the patently unfair Unincorporated Business Tax, and encouraged tourists and residents alike to shop in the city with sales tax holidays and a significant reduction in the hotel occupancy tax. This is the record of a man who fully understands the damage that high taxes can do to small businesses and the benefits derived from small business owners’ freedom to make choices with their capital.
Governor Romney, a successful management consultant to be sure, has a much different record when it comes to small business in the Commonwealth of Massachusetts. Set aside the fact that Romney could not achieve a single, broad-based tax cut for the people or businesses of his state, or the unfortunate reality that the Massachusetts economy lagged behind the national economy during his four-year tenure, Governor Romney significantly raised taxes and fees on small businesses.
Romney removed the sales tax exemption for gas, steam, electricity and heating fuel for successful small businesses. Before Romney became Governor, these small businesses were exempt from the so-called “Sting Tax.” Now they are forced to pay it, thanks to Mitt Romney. Governor Romney imposed sales taxes on companies using many kinds of direct mail advertisements such as mail order catalogs, department store catalogs, and telephone directories. Romney raised fees – or as some in Massachusetts call them, taxes in disguise – on small businesses more than sixty different times. And, tellingly, the preeminent accomplishment of his time as Governor, his government-mandated healthcare plan, not only requires that employers provide healthcare to workers, it actually fines them when they don’t.
The intention here is not to disparage Romney – as he often points out, he faced a tough environment in Massachusetts. Rather, the intention is to show that Rudy Giuliani, facing an even tougher environment in New York City, had far more success improving the economic freedom of his city. Rudy’s efforts translated into real, tangible benefits for the people of New York City, and if elected President, we should expect to see the same efforts going forward.
National Giuliani Campaign Co-Chair
President & CEO, Forbes
Editor-in-Chief, Forbes magazine