Children and millions of vertically challenged Americans aside, small businesses are the most important little guys in the United States. Both candidates will aggressively fight the hearts and (more importantly) votes of what should be the most directly effected group of the policy agenda of the victor in 2004. Democratic presidential candidate John Kerry and President George W. Bush both come to the table with backgrounds in small business, of which both were ironically failures. Kerry's 1979 muffin and cookie shop venture didn't do so well, while Bush had better luck in baseball franchising than the oil business. They may have been able to learn a few things from the entrepreneurship club on campus.
All joking aside about their personal business backgrounds, their small business policies will effect many business grads, as well as the countless graduates from other majors that will eventually be small business owners ten or twenty years down the road. Choosing a candidate that is good for small business is especially important at a time when our economy relies on their unique ability to innovate, thrive, and compete in a highly competitive world market. Laws must be crafted to keep the United States the best place to invest in the world, and foster growth of an economy with a small highly efficient manufacturing sector and a large service economy. The specialized demands of the service economy and high skill manufacturing both foster the growth of flexible small businesses.
This vital sector of the economy favors the key ingredients of the Bush plan. Keeping the tax relief permanent will allow 23 million small business owners to receive tax cuts averaging $2,042, which brings wealth back into the economy and out of the pork barrel politics of Congress. Although this plan includes the dreaded tax cut for those evil people that make over $200,000 a year that Kerry will seem to use to fund every single program he has yet to come up with, this ignores the fact that many of these people are small business owners as well as investors. Tax cuts do not stay static in rich people's bank accounts; but instead end up back in the market as investments, venture capital and consumer spending. Dividend as well as income tax cuts reward people for investing in the economy, and eliminate government as an intermediary slowing down the flow of money.
As boring as health care policy sounds to a college student, these policies may be hitting your entrepreneurial pocketbook in 20 years. The nation's health care system is still operating on a big business model, where large companies have more bargaining power with insurance companies in the market. As the baby boom generation ages, health insurance premiums are at an almost constant rise. The Bush plan would propose AHPs (Association Health Plans) to allow small businesses to pool their resources to bargain for better insurance rates. Health Savings Accounts also aid in encouraging competition while keeping costs low. They are tax-free accounts that can be used to save for medical expenses. According to the NFIB (National Federation of Independent Business), HSAs will help save their owners 10 to 35 percent in out of pocket medical costs.
Instead of creating an entire new network of bureaucratic nightmares for small businesses to go through for a government sponsored healthcare system, Bush's plans creatively use simple changes to the current system to encourage competition in the insurance sector, allowing small businesses to cut health care costs without red tape and regulation.
Bush's plan also addresses regulation itself as an obvious enemy to small business. To help tear down regulatory barriers to job creation, Bush gave small businesses a larger voice in the complex and confusing federal regulatory process and bolstered federal agency compliance with the Regulatory Flexibility Act (RFA) by signing Executive Order 13272. The RFA put the priority on addressing the needs of small business within the various regulatory agencies in Washington. According to the NFIB, advocacy through this act has helped small business save an estimated $27 billion in regulatory costs over the past two years. Combined with proposed tort reform initiatives, these measures should come as a well-deserved breath of fresh air for small business owners.
Small business America is favoring these pro-growth oriented policies of the Republican Party. Fundamentally, what Bush is proposing should come as no surprise to the commonsensical person. When you reward success, reward investment, encourage competition and cut down on trivial lawsuits the small business community will reward your economy tenfold with new jobs and innovations. The only prudent long-term strategies for keeping businesses inside the states are lowering the tax burden and promoting deregulation. By supporting the little guy, we can continue the dream of the founders of a free society for the pursuit of happiness by rewarding the innovation and hard work of entrepreneurs.
Tom Rippinger is a senior political science major. He supports President George W. Bush and is the Co-President of the Notre Dame College Republicans. He can be contacted at trippin1@nd.edu.
The views expressed in this column are those of the author and not necessarily those of The Observer.
