Last updated on May 13th, 2019 at 02:32 pm
If there is one character trait that stands out among America’s entrepreneurs, it is optimism. Starting a small business demands more than a desire to control one’s destiny and a willingness to take risks. It calls for a positive outlook.
When the NFIB Small Business Economic Trends survey was tallied in December, the optimism index among small firms soared four points to tie a 30-year-old record. What sparked that upbeat report? Expectations of good times ahead.
With all the challenges facing the nation, there is no better time to sweep away obstacles that prevent existing small businesses from growing and new ones from starting, and thus creating more jobs. That is the message small business is delivering to Capitol Hill as the 109th Congress begins to craft its legislative agenda.
It’s just common sense. To raise the optimism of small-business owners and those who want to start a business, the formula for success is simple: subtract the complex tax code, excessive regulations and frivolous lawsuits and add affordable health care.
For nearly two decades, taxes have ranked among the top concerns of small-business owners. According to The Tax Foundation, the total effective tax rate in 2003, which encompasses the total tax burden from all levels of government, was more than 28.5 percent, a figure higher than at any time during World War II. Taxes on the average household are now greater than the combined cost of food, clothing, shelter and transportation.
Unlike the nation’s confusing tax code, the plea from small-business owners is not complicated. Plainly stated, they want Congress to simplify the code and reduce taxes.
Having to decipher and comply with the current tax laws, which potentially challenge owners with 200 different requirements, are among the greatest burdens on small firms. It’s no wonder that more than eight-of-10 small- business owners are forced to rely on professional tax practitioners to prepare their tax returns – a costly and time-consuming practice.
Optimism, hence small business creation and growth, can also be sparked if Congress takes meaningful steps to reduce the load of excessive regulation and intrusive laws. Instead of devoting all of their time to satisfying customers, these entrepreneurs spend an inordinate amount of their daily schedules grappling with unclear and confusing government instructions, a steadily growing mountain of paperwork and duplicate information requests.
That small-business owners have any optimism at all is somewhat amazing when faced with the fact that lawsuit filings have tripled in the past 30 years. Frivolous lawsuits and out-of-control, lottery-sized damage awards are steadily raising the threat to small firms. Within just the past five years, more than one-tenth of owners have been sued or threatened with liability litigation.
Do you want to see small-business growth and job creation take off? Congress can make it happen by passing legislation to allow associations to offer health insurance to their small business members; expand options for individuals to buy their own insurance; oppose health care mandates and permit the self-employed to deduct health care costs.
It’s a simple formula: optimism plus entrepreneurship equals small-business growth.
Jack Faris is president of NFIB (the National Federation of Independent Business), the nation’s largest small business advocacy group. For further information about the organization’s presence in Wisconsin, visit http://www.nfib.com/page/homeWI.
January 21, 2005, Small Business Times, Milwaukee, WI