Opening the Door to a Healthy Economy - Supporting our Small Businesses

Congressman Bob Barr, May 10, 2002

America’s small businesses are the engine of our economy and the heart of our communities. They account for 99.7 percent of the nation’s employers, employ 53 percent of the private work force, contribute 47 percent of all sales in the country, and are responsible for 50 percent of the private gross domestic product. Moreover, it is often typical of small business owners to involve themselves in the community through charitable and civic organizations.

Unfortunately, and all too often, the federal government does not treat small businesses well. Some in government forget it is not government’s job to create wealth, but to support an environment in which entrepreneurship can flourish; an environment that drives innovation and encourages competition. New businesses are established on the very premise that they can do a better job. Yet, burdensome regulations, a complex tax code, and an inaccessible health care system are stifling this innovation.

Federal regulations cost American businesses up to $700 billion a year! What’s even worse, this regulatory burden falls most heavily on the smallest businesses, which can least afford to divert employees and money to comply with regulations. This excessive burden puts American companies at a serious disadvantage with their foreign competitors. who rarely face similar burdens. This costs American jobs; lots of them. Something must be done - government is meant to be the servant of the people, not the judge, jury and master of honest, hard-working Americans.

In recent months, under the leadership of President Bush, we have made some progress. The Tax Relief Act of 2001, for example, reaped tremendous rewards for small business. Roughly 85 percent of America’s small businesses - 17.4 million - pay taxes at individual rates, and will benefit directly from the marginal tax rate reductions contained in that Act. It will also eliminate -- at least temporarily -- one of the most archaic and destructive taxes in our tax code -- the death tax. The death tax stifles growth, kills jobs, discourages savings, ruins family businesses, and penalizes middle-class entrepreneurs who spend a lifetime working and investing to provide for their families and communities.

Congress last year also repealed the ergonomics rule approved by the Clinton Administration in its final hours, and which would have cost American small businesses over $100 billion. This single regulation would have imposed an enormous cost on small businesses especially.

We have made some progress, but more must be done. National Small Business Week was recognized this year from May 5-11; an appropriate time to focus our sights on the work ahead of us. First, we must permanently repeal the death tax. Under an arcane rule passed by the Democrat-controlled Senate, this tax relief legislation will expire after 10 years. The Republican-controlled House recently passed legislation to make the tax relief permanent. It is my hope the Senate will do likewise, but the chances of this happening so long as Tom Daschle remains Senate Majority Leader, are virtually nonexistent.

We must also continue to fight for comprehensive tax reform - scrap our outdated tax code and put in place a simple, fair system that does not penalize small business owners and investors simply for being successful.

The entrepreneurial spirit that made this country what it is today is clearly alive and well. The challenge ahead of us is to ensure government does its part to let that spirit grow rather than stifling it.

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