Small Business Under Siege

Jun 30, 2009

By Tom Donohue, President and CEO, U.S. Chamber of Commerce
July 28, 2009

Some may remember the old country song "Looking for Love in All the Wrong Places." Something similar is happening in Washington today—politicians are looking for recovery in all the wrong places, namely, more government programs and spending. Instead, they should look to small businesses, which have led us out of the last seven recessions and create 60% to 80% of net new jobs.

But rather than giving entrepreneurs a helping hand, Washington is giving them the back of its hand. Aside from some helpful provisions in the messy stimulus bill to extend loss carryback provisions and increase small business expensing—as well as the administration's efforts to increase small business lending—policymakers are doing more harm than good. Let us count the ways.

The House health care reform bill would slap a huge tax on the so-called wealthy. Unfortunately, that tax would paint a bull's-eye on two-thirds of small business profits. According to a Tax Foundation report, this surtax would push the top marginal tax rate over 50% in 39 states, capturing many small businesses who file as individuals.

The House bill would also mandate that employers with payrolls of more than $250,000 provide health insurance to their employees. Businesses that fail to comply would be forced to pay an additional 8% in payroll taxes. Congress seems content to dip its hand into the pockets of the entrepreneurs who invest in job creation and economic development, when they should be working toward real reform.

Small business owners are also in the crosshairs of cap-and-trade legislation that recently passed the House. The Congressional Budget Office estimates that gasoline prices could increase by as much as $0.77 per gallon, and a National Black Chamber of Commerce study determined that electricity rates would increase 7.3% by 2015.

Card check legislation would take away workers' rights to a secret ballot, making it easier to unionize workplaces of all sizes through threats and coercion. Less talked about is a provision that would open the door to forced binding federal arbitration between unionized employees and their employers. This could lead to government bureaucrats dictating fundamental business practices.

The Chamber has had enough. We are vigorously opposing all these things, even as we seek to cooperate with the administration and Congress in other areas. We support expanded health coverage, environmental protection, and fair workplace rules, but they must be achieved in the right way—through entrepreneurship, innovation, and common sense—not through bigger government.