Posts Tagged ‘government’

Why Washington Doesn’t Get Small Business

Thursday, December 10th, 2009

Blog content provided by Barbara Weltman, Publisher of Big Ideas for Small Business ®

Many small business owners nationwide have been astounded by the proposals and laws that have come out of Washington in the past 11 months. Despite rhetoric that Washington values small businesses and recognizes their importance as job creators, the drift from the city on the Potomac has been anything but helpful; sometimes it’s been downright hostile. Maybe now we know why…

According to information from JP Morgan Global Wealth Management (as reported in The Enterprise Blog and in other places), the current administration has virtually know one in it with business experience (let alone small business experience).

Since Teddy Roosevelt, the number of cabinet appointees with private sector experience generally averaged around 40% (the percentage reached 58% with Eisenhower and 56% with Reagan while falling to a low of 31% with Carter and 28% with Kennedy). The percentage for the current administration is only 8%–practically no one in charge of business policy has any real life experience working in a business or running one. How can policy be made that directly affects business without understanding the impact it would have on business?

A quick look at the new regulations, taxes, and other burdens that would be imposed on business by health care reform and cap and trade demonstrates the lack of understanding about small business. How can a jobs policy be made when key representatives of employers, including the National Federation of Independent Business (NFIB), the U.S. Chamber of Commerce, and the National Association of Manufacturers, are not invited to the jobs summit?

The NFIB Index of Small Business Optimism continues to plummet, as evidenced for numbers released for November. The biggest problem cited by respondents was the lack of customers, but I suspect things go deeper.

According to NFIB Chief Economist, William C. Dunkelberg, “The economy may be turning, but small firms are not convinced things will improve anytime in the near future.”  One reason for this pessimism—no support from Washington.

While homeowners, car manufacturers and car buyers, big banks, and other sectors have received bailouts, tax incentives, and other government support, there has been almost nothing for small businesses. With practically no one in authority in Washington who understand business’s plight, it’s unlikely that there will be any meaningful assistance forthcoming for small business.

Health Care Plan Could Undermine Small Business

Wednesday, July 15th, 2009

Blog content provided by Barbara Weltman, Publisher of Big Ideas for Small Business ®

The description of the House’s national health care plan runs 50 pages; the actual bill exceeds 1,000 pages. What would this massive proposal, if enacted, mean to you? It seems likely that some existing businesses would close because of the added cost of doing business, potential start-ups might never get started, and, for those that continue to operate, it would certainly cost them more.

Here are some key points in the proposal under debate:

  1. Businesses would face a choice: provide health care (within limits set by the government) or pay a penalty. Businesses with more than $500,000 in revenues that do not provide coverage would pay a penalty of 8% of payroll. There would be a graduated penalty for businesses with revenues between $250,000 to $500,000; business with less than $250,000 would be exempt from the mandate.
  2. Self-employed individuals would be required to buy their own health insurance or pay a penalty of 2.5% of income.
  3. A surtax would be imposed on higher-income individuals (many of whom are small business owners). At the lower end of the surtax rate scale, individuals with income of $280,000 and couples with income of 350,000 would owe a 1% surtax; at the top end, couples with income of more than $1 million would pay a 5.4% surtax.

What do we get for this high cost?  A government-run health plan that could undermine the current private insurance system now in place. It remains to be seen who would determine the care that could be obtained under this system. We can only guess whether care will be better or worse under this system.

My only question: Would members of Congress be covered by this new program or would they continue to enjoy their special health coverage?