A Small Business Agenda for the First 100 Days
The 2016 election and the transition of a new administration creates an urgent need to address a number of key issues that impact America’s entrepreneurs. As a central part of our economy, our nation’s small businesses will be a crucial voice in upcoming debates, and policymakers must keep them top-of-mind when considering significant policy changes.
A thriving small business ecosystem is essential to creating a dynamic and inclusive economy. Small business entrepreneurship is a proven pathway for Americans from all walks of life to build income, independence and financial security for themselves, their families and their employees. Small businesses account for half of our nation’s jobs and economic output, and their creativity spurs innovation in all sectors of the economy. When provided the proper resources and policies to unleash their potential, they inject life and vitality into their communities, provide quality local jobs and boost prosperity for all.
As such, Congress and the new administration must focus on policies that ensure the wellbeing of America’s small businesses.
Preserving the Benefits of the Affordable Care Act
Over the past four years, the Patient Protection and Affordable Care Act (ACA) has provided healthcare to more than 20 million individuals who otherwise couldn’t access coverage. While certain provisions of the ACA can and should be improved–including support for the small business marketplaces, expanding the small business tax credit and addressing issues of risk in the insurance market–repealing the ACA will eradicate hard-won benefits for America’s entrepreneurs, cause a rapid rise in healthcare costs and create tremendous economic instability.
Since 2010 the increase in small business healthcare costs has been at the lowest level in years, following regular double-digit increases prior to the law’s enactment. The ACA has also eliminated “job lock,” allowing workers who previously felt tied to their job by their benefits package to strike out on their own entrepreneurial path or join thriving small businesses.
In addition to the financial support that enables entrepreneurs and small business employees to purchase medical insurance in competitive markets, the law has enabled most states to expand their Medicaid programs, allowing the lowest-income small business employees to obtain health coverage. These critical provisions must be maintained.
We cannot return to the old way of doing business. Rather than repealing the ACA, we must improve the law, making it even easier for small business owners, their employees and self-employed Americans to gain the coverage that is necessary for their success and prosperity.
Ensuring that Tax Reform Creates a Level Playing Field
For too long, our nation’s tax system has benefited the wealthiest Americans and large multinational corporations—leaving the rest of the country, particularly small business owners, to foot the bill. Small Business Majority’s polling has shown that 90% of small business owners believe big corporations use loopholes to avoid taxes that small businesses have to pay, and 92% believe corporations’ use of those loopholes is a problem. Similarly, 9 out of 10 small business owners believe that U.S. multinational corporations that use these loopholes to shift U.S. profits overseas is a problem.
Our country’s largest companies don’t need a tax break; rather, we need a tax system that benefits America’s entrepreneurs who are focused on growing their enterprises and making payroll at the end of each month. Small businesses can certainly benefit from a reduction in corporate tax rates, but only if accompanied by the elimination of costly loopholes that only benefit large corporations. Moreover, regardless of what type of one-time offshore tax repatriation policy is enacted, we must end the ability of multinational corporations to park profits in other countries simply to avoid paying taxes.
Finally, giving a tax credit to the top 1% of wealthy individuals, very few of whom own small businesses or family farms, won’t do our economy any favors. Reducing top tax personal rates and eliminating the estate tax will benefit almost no small businesses and will expand the deficit to unmanageable levels, ensuring that small business owners and other ordinary taxpayers will be left to foot the bill.
Infrastructure that Provides a Foundation for Small Business Success
Investment in our nation’s infrastructure is an investment in America, pure and simple, creating tremendous opportunities for small businesses. Nearly 25% of our country’s 605,000 bridges are failing, one-third of America’s major roads are in poor or mediocre condition and much of rural America lacks crucial access to broadband technology. Investing in our infrastructure supports access to customers and suppliers, enhances business operations and creates demand for the goods and services small businesses have to sell. Not only do small businesses anchor the supply chain for infrastructure initiatives themselves, they run the hotels, coffee shops, restaurants and other businesses that serve the people working on these projects.
Our polling shows that more than three-quarters of small business owners oppose reductions in government infrastructure funding. As such, we must ensure that federal support for infrastructure, particularly that which results from offshore tax repatriation, is targeted to actual projects that would not be possible without such funding and that directly benefit small business commercial enterprises.
Expanding Access to Capital & Responsible Lending
For years, and particularly since the 2008-09 recession, small business owners have felt a squeeze on credit available to them to build their business. Traditional banks and other sources of small business credit have decreased the number of loans they are making, while increasing their minimum loan levels above the amount that most small businesses need. Also, the lending options that do exist have become too burdensome and complicated to access, and don’t operate on the rapid schedule that most small businesses need. Small Business Majority’s research found that 90% of small business owners agree that the availability of small business loans is a problem, with 60% saying they’ve faced difficulties finding credit themselves.
We must do everything we can to support the Small Business Administration (SBA) and its loan guarantee programs, while encouraging the SBA to focus on the smallest borrowers with the most need, and, at the same time, recognizing that not all small business credit needs can be met by traditional banking sources.
New alternative/online lending opportunities have recently sprung up to fill this expanded market need. While some of these new lenders are behaving responsibly in providing much needed capital to entrepreneurs, others are taking advantage of this largely unregulated market—making small business owners vulnerable to the same sort of predatory practices that we see in the consumer space. We need policies and practices that foster a responsible small business lending environment.
Maximizing the Economic Benefits Generated by Immigration
Immigrants are twice as likely as the average person to start small businesses. As such, they are an essential component of our small business, job-creating economy. We must have public polices that foster this economic dynamism.
Moreover, small business’ hiring pool is limited under current immigration laws. More and more we hear from small business owners that they struggle to find qualified workers and need a larger applicant pool. Comprehensive immigration reform will help satisfy that gap and drive expanded economic growth.
Small Business Majority’s polling shows that a vast majority of our nation’s small business owners agree that the most appropriate immigration solution is to create a path toward citizenship accompanied by effective enforcement. Three-quarters believe we would be better off if people who are now in the country illegally became legal taxpayers, so they can pay their fair share. We must implement responsible immigration reform and combat policies that inhibit the economic benefits our immigrant population brings to our country.
About Small Business Majority
Small Business Majority was founded and is run by small business owners to ensure that America’s entrepreneurs are a key part of an inclusive, equitable, diverse economy. Since 2005, we have actively engaged small business owners and policymakers in support of public policy solutions, and have delivered information and resources to entrepreneurs that promote small business growth and drive a strong, sustainable job-creating economy. We are a team of 26 working from our 10 offices in Washington, D.C., and eight states. We regularly engage our network of more than 50,000 small business owners and more than 1,000 national, state and local business organizations. Our extensive scientific polling, focus groups and economic research help us educate and inform policymakers, the media and other stakeholders about key issues impacting small businesses and freelancers, including access to capital, taxes, healthcare, retirement, entrepreneurship, workforce development, and more.