Clinton vs. Trump: Who’ll champion small biz?
From the pages of In Business magazine.
Unless lightning strikes, America’s major political parties have given us a wretched choice between two flawed presidential nominees — Hillary Clinton and Donald Trump. However, I’m holding out hope that something good can come of this. Like it or not, one of these two people will be the next president, but perhaps the winner will address barriers to small business development.
Those barriers would include, but are not limited to, the regulatory barrage that lumps small businesses and the community banks that serve them with the Wall Street entities that caused the near financial collapse of 2008. Those corporate bad boys asked for a regulatory comeuppance. Small businesses, however, did nothing to cause the recession, but they are getting swept into the same regulatory net. As a result, they pay an average of $11,000 per employee in federal regulatory costs, according to the Competitive Enterprise Institute, and that’s before the tax bill bites.
Speaking of which, the U.S. has the third highest corporate tax rate in the world — 35% — and because the vast majority of Wisconsin businesses file their taxes as individuals, and individuals have seen their federal tax burden rise, the top effective federal rate for these companies approaches 45%. When state and local taxes and fees are factored in, their tax burden rises above 50%.
Throw in higher premiums for medical insurance and you can see why the number of business failures is higher than the number of startups. When business resources must be devoted to complying with excessive regulatory compliance and taxes, that leaves less for new hires, less for boosting the wages of deserving employees, and less for better benefits.
Now that it’s clear that annual economic growth will be below 3% for the 10th consecutive year, perhaps the candidates can rise above the obvious joy they derive from “going Soprano” on one another and instead explain how they will help the small employers that create most of the new jobs in this economy — when the business climate allows them to.
Perhaps Clinton can forget about putting coal miners out of work, rediscover the Democratic Party’s “little guy” roots, and begin to move the needle in the right direction. Maybe Trump can stop trying to convince voters to blame their economic anxieties on immigrants and focus on what’s really suppressing wages.
It’s time for someone to emerge as a small-business champion. Who will it be?
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