John Arensmeyer

The latest jobs data shows small businesses are off to a running start in the job creation department this year, proving entrepreneurs are doing more than ever to lift post-recession employment. But it’s also true that small firms aren’t immune to the lingering effects of our disrupted financial market. Despite the mantra that slackening Wall Street’s reins will promote economic growth, recent national opinion polling reveals the majority of entrepreneurs believe the opposite: Wall Street should be held accountable for the financial crisis with rules that are stronger, not weaker.

A whopping 80 percent of small business owners agree with this, according to scientific polling conducted in January for Small Business Majority. Considering the oft-politicized nature of this topic, it’s noteworthy that not only was this a majority Republican sample, but more than seven in 10 Republican owners believe we need tougher rules for holding Wall Street accountable. Entrepreneurs aren’t politically minded, they’re business minded. That’s why this isn’t a party line issue for them. It’s a bottom-line issue, plain and simple, meaning it impacts their capacity to grow and hire.

With that in mind, it shouldn’t be surprising that nearly six in 10 entrepreneurs agree that for far too long, Wall Street banks and financial companies wrote their own rules while nobody was looking out for small businesses and consumers. They believe we need the Consumer Financial Protection Bureau (CFPB) — a federal organization that helps prevent financial companies from using abusive lending practices that can affect small businesses. Eighty-four percent of owners generally support the CFPB, underscoring the consensus that our nation is long overdue for a fairer financial system.

Small business owner Shaundell Newsome couldn’t agree more. Shaundell, the president and CEO of Sumnu Marketing in Las Vegas feels more work needs to be done to give small businesses the ability to push back against unfair financial practices. “A lot of small businesses don’t have the power or the resources to fight against the big banks and financial companies,” he said. “These companies’ practices haven’t really changed since the recession, which is why it’s incredibly important the Consumer Financial Protection Bureau was created to keep them accountable. However, another factor is that many of the protections individuals are seeing should be afforded to small businesses, as well.”

Herein lies another issue the poll shed light on: the strong link between small business finance and personal credit. Fifty-eight percent of respondents have used a personal credit card to finance their business, and 53 percent have personally guaranteed a loan for their business. This helps explain why small businesses strongly support provisions of the 2009 Credit CARD Act — although ‘strongly’ might be an understatement.

Every single provision we polled on from this law, which established a series of consumer protections from banks and other financial institutions, was supported by nearly 100 percent of respondents. For example, 98 percent support requiring credit card companies to provide clear descriptions of what factors trigger a higher interest amount. But this requirement and others only apply to personal credit cards. Echoing Shaundell Newsome, a sweeping majority of 19 in 20 small employers want consumer protections expanded to protect businesses, too.

If businesses had stronger protection from predatory financial practices, imagine how much more they could do to grow the economy. New employment data indicates firms with fewer than 50 employees created six in 10 new jobs in January. That’s a big step in the right direction. However, positive steps forward don’t mean it’s time to ease back on Wall Street financial institutions, as small business owners have made clear. If we want them to continue playing a significant role in rebuilding our economy, entrepreneurs need protection from the practices that caused our fiscal crisis.

Follow Small Business Majority on Twitter: www.twitter.com/SmlBizMajority

John Arensmeyer

Small business has been the focus of Washington’s high-profile tax debate, both prior to and following the “fiscal cliff” fracas that closed out 2012. But as noisy as the small business tax issue has been, there’s been considerably more time spent debating cuts that will help a thin sliver of taxpayers in the top brackets than hashing out solutions that will help the vast majority of entrepreneurs

Fortunately, last week the tax code was improved in a fashion that will put a very helpful tax deduction within reach of the bulk of our nation’s job creators. The Internal Revenue Services announced that a new, simpler option for calculating the home office tax deduction will be available on 2013 tax returns.

Tales of tax deductions aren’t something you normally regale friends and family with around the dinner table. But when you get down to it, what this improved deduction means is that small business owners and employees working from a qualified home office will be able to deduct up to $1,500 per year. And that’s a lot of bread.

What’s more, an estimated 52 percent of small businesses have home-based offices, according to the 2007 U.S. Census. Our own 2012 polling tells the same story. Nationally, 52 percent of the smallest businesses — those with 10 or fewer employees — are home office-based, including some with employees working remotely.

Although the deduction has been around for some time, it’s been underused. In this economy, anything that can help small businesses save cash is a good thing, which is why this is such big news. The Obama Administration made the change expressly to make it easier for small businesses to file their government paperwork, which will give them more time to do what they do best — create jobs and grow the economy. It also increases the likelihood that small business owners will claim this credit and save some money.

This new development shows there are ways to help small business owners beyond just cutting income taxes. Closing loopholes favoring big corporations is a perfect example. Our polling found 72 percent of small business owners believe it’s about time Congress puts a finger in the corporate loophole dike. A sweeping 90 percent favor removing tax breaks for moving production overseas and providing incentives for bringing it home, and 7 in 10 entrepreneurs support a proposal designed to help spur small business job creation by rewarding companies that hire more workers or increase wages by giving them a tax credit.

It’s also important to remember that small business owners are very busy people who often don’t have Human Resources departments, and they want simpler ways to deal with exactly this kind of issue. Our national polling found about three-quarters of entrepreneurs agree we should allow for one-stop electronic filing of government paperwork. Simplifying this deduction is an important step toward streamlining filing processes, and that’s something small business owners have asked for.

The bottom line is, dealing with personal tax cuts is an epic battle, as we’ve seen lately. There’s no reason Congress can’t work smarter instead of harder, and push through proposals that, like this tax deduction, will do some real good for the majority of small businesses and their employees — who, as consumers, are critical to our economy. Making the home office tax deduction easier to claim means more people are likely to take advantage of it. That can lead to more money in small business coffers and consumers’ pockets.

Erica Dowell

Originally featured on the Enroll America blog:

For decades, hardworking entrepreneurs have faced skyrocketing health care costs. And that directly stunts their ability to grow. Small business owners want to provide benefits for their employees—we know that from our research. We also know affordability is the most common concern among small business owners who don’t offer coverage. But the Affordable Care Act is changing that. Health insurance exchanges and small business tax credits are giving small firms the kind of clout that large businesses enjoy in the marketplace, making it easier for them to afford health insurance for their employees. As we quickly approach 2014, when coverage expansions take effect, it’s imperative to educate small business owners about the cost-saving opportunities and coverage options that will be available to them and to their employees.

The Importance of Small Businesses in Communities

Small business owners are one of the most influential groups in the United States. That’s why it’s critical to reach out to them over the coming year to ensure that they learn about health coverage options for themselves and for their employees. According to the Pew Research Center, small business is viewed positively by 71 percent of the public, and, as a group, small business owners are more trusted than churches, academic institutions, large corporations, and more.

What’s more, as the nation’s top job creators, entrepreneurs are a trusted source of information and are able to help make strong economic and jobs arguments. Small businesses represent 99.7 percent of all employer firms and half of private sector employment. Small business owners are the fabric of their communities, and, most often, they are pragmatic individuals who put business before politics. Numerous surveys have shown they are extremely diverse politically, which is another reason small business is viewed positively by so much of the public.

Who Do Small Businesses Turn to for Information?

The online health insurance exchanges that must be up and running in 2014 are the most important component of reform for small firms. But major outreach efforts are necessary to inform entrepreneurs about this new option for purchasing coverage. Our research has found that brokers are an important element in the outreach process to small businesses around the exchange. As trusted sources of information, they have a key educational role: 75 percent of small business owners with fewer than 20 employees use brokers, and 88 percent of them say their brokers’ opinions carry significant weight. In addition to brokers, small business owners also rely on accountants, chambers of commerce, and trade groups as information sources. These groups have the potential to be extremely effective messengers when it comes to educating people about the new health coverage options that will be available starting October 1, 2013, which is why it’;s important to get them involved in outreach and enrollment efforts now.

Along with the insurance exchanges, small businesses should also be informed about tax credits that are available in the law. Small businesses with fewer than 25 employees and average annual wages below $50,000 who cover at least 50 percent of premiums are eligible for a tax credit of up to 35 percent. Among eligible owners, awareness of this credit isn’t nearly as high as it should be. Our recent opinion poll found that more than half of all entrepreneurs do not know the credit exists.

Next Steps

Clearly, there’s plenty of work to be done to educate small employers about enrollment opportunities in their communities. Conducting outreach to 6 million small employers and 21 million self-employed entrepreneurs will be difficult. But with all hands on deck, we can make sure small business owners know exactly which coverage options are available and how they can benefit from them.

John Arensmeyer

Original statement issued Jan. 1, 2013:

The small business community and the nation breathed a sigh of relief today as lawmakers reached a bi-partisan 11th hour deal to avert the “fiscal cliff,” while taking significant steps to reduce our budget deficit. However, more work must be done to put our country on a responsible path toward long-term economic growth and fiscal sustainability.

Small business owners have been very concerned about the fiscal cliff and nearly every tax and spending component surrounding it, according to scientific opinion polling Small Business Majority released in November. Specifically, the majority of small employers overwhelmingly agree that tax cuts for the middle class must be extended, but that, in light of our budget crisis and the need to target fiscal policies directly to America’s job creators, tax cuts should expire for the wealthiest 2 percent making more than $250,000 per year. We appreciate the president’s strong stand in support of this policy, but we accept the need to reach a compromise at a higher income level in order to get a deal and avert a fiscal crisis.

We also are pleased with the agreement to permanently fix the Alternative Minimum Tax and maintain other tax provisions that will keep more money in middle class taxpayers’ pockets. And, we are pleased to see that the agreement maintains renewable energy incentives, the R & E tax credit and other business tax incentives, including Section 179 depreciation, while staving off draconian across-the-board spending cuts. But, we are disappointed that a key policy that small business owners strongly supported—the extension of the temporary payroll tax cut—was not included in the final agreement. By more than a 3:1 ratio, small business owners said they are worried about employee payroll taxes going back up.

This is a necessary stop-gap measure. But, it defers important decisions about our nation’s fiscal future. We now urge Congress to come together to address other vital long-term tax policies, including corporate tax reform, and take other important action to balance the need for long-term deficit reduction with targeted policies designed to ensure that our fledgling economic recovery continues. Our elected leaders need to put the needs of the American people over politics and do what is right for the economy and the nation.

John Arensmeyer

This piece was co-authored by Todd McCracken, president and CEO of the National Small Business Association, and was originally featured in The Huffington Post:

Small business owners make hard decisions every day. They compromise on things they sometimes wish they didn’t have to, but they do it for the good of their business, their employees and their families. They do it because they have to if they want to continue running a successful business. Congress is in the business of running this country, and their job right now is to make some hard decisions, compromise even if they don’t want to, and ensure the country avoids the “fiscal cliff.” Congress should follow the example set by our entrepreneurs and find a way to make the compromises needed to ensure we don’t topple into a financial abyss the likes of which we’re just now climbing out of.

The end of the year is mere hours away, when a vast array of tax provisions — many that would take money directly out of the pockets of small businesses and their core customer base — are set to expire at the same time across-the-board spending cuts start to kick in. This dilemma, dubbed the “fiscal cliff,” could spell disaster for the small business community and the slowly recovering economy. Scores of economists have predicted that failing to avoid the cliff could send the nation right back into recession. However, it’s not just avoiding the cliff that’s worrisome. Not having a deal in place creates uncertainty for small businesses and their customers. That translates into more cautious consumers — something small business owners certainly don’t need. And it hamstrings small businesses trying to make financial plans for the coming year. Small businesses can tackle most anything that comes their way — that’s the entrepreneurial spirit — but they can’t plan for a policy that hasn’t been established.

There are many important issues facing the small business community in 2013 — issues we all feel passionately about working on with Congress, such as tax and immigration reform and other critical issues. Getting a bipartisan agreement on the fiscal cliff puts us on the path to a better future and will allow us to focus on finding smart, pragmatic solutions to these other important issues. If the fiscal cliff situation isn’t resolved immediately, however, it will continue to plague small businesses and the nation and keep Congress from working on other important matters.

Small businesses were a powerful theme during the elections. The politicians who campaigned on the importance of small business cannot now forget about them during this critical period. No one expects this to be an easy job for lawmakers, but it’s a job that must be done. The small business community is watching, waiting, and hoping Congress and the president come together now and frame an agreement that keeps their needs in mind. The future success of many small businesses depends on it.