Small Business is the Engine of the Nation’s Economy

Congressman Ed Bryant, May 3, 2002

President George W. Bush has designated the week of May 5 as Small Business Week. Small businesses play a big role in our nation’s economy. They not only play an important economic role, but they are also the heart of our communities. Typically, it is the small business people who are the charitable and civic leaders in their neighborhoods. Small businesses tend to give more in charity to community service organizations than large businesses, and tend to target their donations to direct service providers.

Small businesses account for 99.7 percent of the nation’s employers, employing 53 percent of the private work force. Almost half of all sales in the country are made at small businesses, and they are responsible for 50 percent of the private gross domestic product. More than half of small businesses employ fewer than five people, and nearly 90 percent employ fewer than 20 workers. Three-quarters of the net new jobs from 1990 to 1995 were created by small businesses. They are the engine of our nation’s economy.

However, for all the good that small businesses do, burdensome regulations, a complex tax code, and inaccessible health care are stifling them. Small business owners face a tax and regulatory system that overburdens and demoralizes them. Government is supposed to serve the people, yet the existing federal tax and regulatory state unfairly acts as judge, jury and master of honest, hard-working Americans.

Fewer regulations, lower taxes, and a free-market approach to health care will make it easier for small business owners to do what they do best -- create jobs. For too long, Washington has been part of the problem, but President Bush has been working in partnership with Congress to help small businesses overcome some of these hurdles.

The Economic Growth and Tax Relief Act that was signed into law last year included the lowering of individual tax rates and the repeal of the estate, or death, tax. A large majority of small businesses, 85%, pay their taxes on an individual, and not corporate, rate.

Without the repeal of the estate tax, one-third of small business owners today would have to sell outright or liquidate a part of their business to pay the tax. More than 70 percent of family businesses do not survive to the second generation and 87 percent do not make it to a third generation. With the removal of this unfair tax, and the lowering of individual tax rates, we can encourage small-businesses to create jobs and invest in the local economy.

Congress and the President are aggressively pursuing a small business agenda designed to encourage small business growth and prosperity. We need to provide small businesses tax incentives to make it easier for them to make important job-creating investments. Regulatory barriers that are preventing job creation need to be torn down, and small business owners need to have a voice in the complex and confusing federal regulatory process.

Last year, the House passed legislation that would allow for the creation of Association Health Plans. These plans would allow for small businesses to join together to purchase health insurance for their employees. This will give small business owners more power to provide health care for their uninsured employees, and to improve the health care options for employees who already have insurance. Finally, we need ensure that small businesses are on a level playing field for procuring government contracts.

Small businesses are an integral part of our economy, and of our community. It is highly probable that either you, or someone very close to you is employed by a small business. With President Bush and Speaker Dennis Hastert’s leadership, government has finally begun to work for small businesses, and not the other way around.

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