Small Business

A successful small business is one of the best ways for citizens to move up the “ladder of prosperity.”  Small businesses create nearly ⅔ of new jobs which really drives the American economy.  The Great Recession of 2008 hit small businesses hard and new business formation has fallen 15% since 2007.

Here is what the candidates will do for small businesses.

Clinton:  As the daughter of a small business owner, this is a very important issue for Clinton and she has an extensive and detailed plan aimed at making it easier to start a business, make a profit, get financing, find investors, offer health care and benefits, work with the federal government, and fight back when you’re getting taken advantage of.  She also wants to provide tax relief.  Her plan is representative of someone with a deep understanding of the issues who has spent years listening to the concerns of small business owners.  Here are some highlights.

She will federally fund any state that makes starting a business cheaper, easier, and who will streamline unnecessary licensing programs.  She will expand access to credit and offer training and mentorship programs in underserved communities for budding entrepreneurs and small business owners.  She will allow small business owners to defer student loans with no interest while they are getting their businesses off the ground.  She has called for a 100% tax exclusion on capital gains tax for long-term small business investments.

Concerning taxes, she will make a new standard deduction for small businesses, similar to what is available to individual filers.  She wants to simplify the tax process and quadruple the start-up tax deduction.  She wants to expand the health care tax credit through the Affordable Care Act and allow small businesses to pool together to offer retirement plans to their employees.

She will work to ensure that federal regulations aren’t holding small businesses back and therefore holding the economy back and she will do more to ensure small businesses get paid what is due to them so they aren’t taken advantage of by bigger businesses that hire them.  She has announced a plan to specifically enhance legal protections for small businesses who get stiffed by large firms.

Trump:  The only detail concerning small businesses I could find comes from Trump’s speech at the Detroit Economic Club, where he said, “No American company will pay more than 15% of their business income in taxes.”  Although, I have also found sources where he leaves out small businesses in his plan. Still, he reiterated this in the 1st presidential debate by saying, “Under my plan, I’ll be reducing taxes tremendously, from 35 percent to 15 percent for companies, small and big businesses.”  He went on to say, “That’s going to be a job creator like we haven’t seen since Ronald Reagan. It’s going to be a beautiful thing to watch.”  

First of all, a reminder from my post on jobs: Bill Clinton was the all-time leader in jobs creation followed by Carter, Johnson, and Reagan in 4th.  Additionally, according to Fortune.com, economists and policy experts don’t agree that it will be a miraculous job creator.  They quote co-director of the Center for Economic Policy and Research, Dean Baker, who says, “The idea that cutting taxes will lead to a surge in business investment should not be taken seriously at this point.  We have a large body of academic research showing investment is relatively unresponsive to tax rates, but more importantly we have actually tried this twice—(with) Reagan and Bush–and neither time was there a noticeable uptick in investment.”  

Of note here, also, is Donald Trump’s reputation for not paying the small business owners who work for him.  There is story after story after story about how he put people out of business when he didn’t pay them their due.  When confronted with this in the debate he replied flippantly, “Maybe he didn’t do a good job, and I was unsatisfied with his work.”

Additionally, a strong economy is the best indicator of success for small businesses, and Trump has proven himself a major threat to the U.S. economy which has been cited by numerous independent sources and backed by billionaires such as Warren Buffett, Meg Whitman, and Michael Bloomberg.

Finally, did you know that 40% of Fortune 500 companies have been started by immigrants or their children, including Steve Jobs, son of a Syrian immigrant?  Discouraging immigration hurts the economy and ultimately, small business.