By Rhonda Abrams
Gannett News Service
The Republican Party controls the White House, the Senate and the House of Representatives. Conventional wisdom holds that Republicans are good for business, but are they good for all businesses or just the big ones?
Through both Democratic and Republican administrations, I've seen very little tax legislation that directly and specifically aids small companies.
In fact, some policies aiding big companies actually hurt smaller ones. Tighter bankruptcy laws, for instance, help big banks and big corporations, but may make it more difficult for an entrepreneur to start over after a failed small enterprise.
Small business wants solutions, not exemptions. In the past, the primary response to the needs of small business has been to exempt them from legislation - family leave, employee benefits and workplace safety. That assumes small business owners don't want to offer their employees benefits or a safe workplace. They do. It's just expensive, and they need help.
So, with Republicans firmly in control, I challenge the administration to specifically aid small business, starting with:
1. A small-business capital-gains tax incentive. It's risky for investors to put their money in young companies. To help counteract that risk, one of the very few tax breaks specifically for small business has been the preferential capital-gains tax rate (14 percent) for investments in small companies. This incentive could be lost. 2. "First employee" tax credit and one-year payroll tax amnesty. Ask any small-business owner, and they'll tell you the most difficult employee to hire is the very first one. It's costly as well as scary. There were 16.1 million "non-employer" businesses as of 1999. They take in plenty of money - $667 billion. If a mere 5 percent of these businesses hired their first employee, small companies could add 800,000 new jobs.
3. Creative solutions for health insurance. More than half of all Americans are employed by small companies. Big corporations can self-insure, but small companies face continually rising premiums. We need a new approach - one that recognizes that everyone deserves health care, but that making employers pay is an outdated approach.
4. Family values in the workplace. When one of my employees adopted a child, I gave him time off - not because the law required it, but because I valued him as an employee. Rather than merely exempting us from these laws, how about some kind of tax credit or revolving-funds pool for the smallest companies?
5. Technology/equipment tax credit for the smallest companies. How about a small tax credit for updating technology?
6. Alternatives to oil. Short term, the government can help small companies become more energy efficient and by doing everything it can to keep oil prices as low as possible.
Long term? We need a national commitment to oil alternatives and programs that encourage small companies to innovate new energy solutions.
Rhonda Abrams writes the nation's most widely read small- business column and is the author of "The Successful Business Plan," "Wear Clean Underwear," and "The Successful Business Organizer." Register to receive Rhonda's free business tips newsletter at www.RhondaOnline.com.
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