Small businesses must be heard for our economy to prosper
Carl Gipson
is the director for Washington Policy Center’s Small Business Center. Visit www.washingtonpolicy.org or call 206-937-9691.
No one doubts the veracity of the claim that small businesses are of the utmost importance to our economy. In fact, elected officials often fall all over themselves to claim their number one concern is to help foster an economic climate that will allow small businesses to thrive. Unfortunately, however, the interest of small businesses and employees is stepped over in the name of political expediency or convenience.
When Washington companies with fewer than 50 workers employ 49 percent of the workforce, or over 1 million workers, one would expect that rules and regulations would be tested before implementation in order to gauge the effect on small businesses—there are millions of jobs at stake, after all.
But the sheer number of regulations facing small business owners continues to grow at an exponential rate. So much so that if you open a business, even before employing anyone other than yourself, your business comes under the purview of 35 sets of regulations enacted by local, state and Federal agencies. After you do manage to get past that murky morass and actually hire someone, you are now subject to 58 sets of regulations.
The Small Business Administration says that regulatory costs are proportionally higher for small businesses. Regulations cost businesses money and lots of time—especially smaller businesses.
Small businesses also face a tremendous challenge now with providing their employees access to quality, affordable health care. If you are a small business owner and you want to hire qualified employees, you need to be able to offer health insurance. In 1991, 63 percent of small businesses provided their employees with health care. That number has since dropped to 47 percent.
Health care is such a complicated, divisive issue, right? True, but there are many bipartisan ideas that have been floating around Olympia the past few years but have yet to make headway. Why? Some lawmakers are wary of taking on such a politically charged issue, some don’t see a way out of our current situation and others simply can’t agree on which direction to go. Not a single one would stand and say that everything is fine and dandy—so at least everyone agrees this is a significant problem.
What about our state’s tax structure for businesses? Are small businesses seeing any improvement in how they pay the taxman? Not if you pay attention to the estate tax and the business and occupation tax. For example, the B&O tax has roundly, and rightly, been vilified on both sides of the political aisle as draconian—but again, neither side can agree on how to go about fixing the problem.
Washington’s B&O tax is unique—no other state has a similar system, and we’re one of just a few states that enacted a new estate tax in order to avoid it being phased out with the federal estate tax that is due to expire in 2010. That should tell you something. No other state sees our tax system as a model to emulate. Our current system unfairly hurts startup, family and unprofitable businesses and, instead of trying for some bold changes, many policymakers spend the majority of their energy proposing targeted tax breaks for special industries instead of trying to improve the system for everyone.
So, what can be done about helping small businesses survive? They open and close in this state in numbers higher than almost anywhere in the nation, so surely there are ways to help keep them afloat.
This fall, Washington Policy Center is going around the state to hold Small Business Issue forums to discuss some of the public policy issues facing our small businesses. Two of the topics mentioned here will be at the forefront of the discussion: health care and the tax burden. Our mission is twofold: first, to help educate small business owners on these topics and how the latest legislation will affect them, and second, to hear the business owners’ own policy recommendations. There will also be an informational session on this year’s statewide ballot initiatives.
The Vancouver Small Business Issue Forum is a luncheon cosponsored by the Greater Vancouver Chamber of Commerce, the Vancouver Business Journal and the Building Industry Association of Vancouver. It will be held on Thursday, Oct. 19, at the Heathman Lodge. Visit www.washingtonpolicy.org for more information.
These forums are a small but important step in reaching many of the people who have dedicated their lives, professions and finances to their endeavors as small business owners.
