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  • Celebrate Small Businesses – They Do an Economy Good

    This week is U.S. Small Business Week, and it’s important to take a moment to recognize those companies that have done so much for the country. It’s especially important because so many of these businesses are being threatened by regulatory burdens imposed by Obamacare and a slew of other economic and environmental regulations.

    America’s 27.2 million small businesses employ nearly 60 million people. Despite their important contribution to the country’s economy, these companies face some of the steepest regulatory costs around. According to one study commissioned by the U.S. Small Business Administration, firms with fewer than 20 employees actually pay 36 percent more in regulatory costs per employee than larger companies. Such a burden makes it difficult for a small business to get off the ground and actually serves to discourage people from even trying to start one, resulting in a stunted economy and less job growth.

    And it’s not just the small business owners that face these enormous costs. Taxpayers are also victims, paying for regulatory costs imposed on businesses in indirect ways. When businesses struggle to pay for their own regulatory costs, they are forced to raise praises, offer fewer choices for consumers, and decrease their overall innovation.

    In this indirect way, Americans are paying $1.75 million per year for small business regulations imposed by big government bureaucrats with special interests in mind—and the cost is increasing every year. The total works out to about $15,000 per household in America. With 9 percent unemployment, it’s hard to justify such a crushing number.

    In a recent testimony before the Senate Committee on Small Business and Entrepreneurship, Heritage Foundation fellow James Gattuso said:

    The impact on small businesses, moreover, goes beyond the direct costs of regulation on their own activities. Small businesses, like individual Americans, also pay “regulatory taxes” in the form of higher prices for goods and services, reduced economic activity and hindered innovation caused by excessive regulation generally.

    It’s clear that quick action on regulatory reform in America is necessary as we struggle to bring our economy back from the brink. Making it easier for small business owners to thrive and create jobs should be a priority for government today.

    In celebration of U.S. Small Business Week, Representative Darrell Issa (R–CA) issued a statement today to support AmericanJobCreators.com, an online campaign to recognize the small business owners around the country who are contributing to job growth. The campaign also seeks to unveil the crushing costs of government regulation and promote the importance of private-sector job creation from a small business perspective.

    Small businesses matter. Celebrate their contribution to our country today.

    Posted in Economics [slideshow_deploy]

    6 Responses to Celebrate Small Businesses – They Do an Economy Good

    1. James, VA says:

      we should make everyone read this…

    2. James, VA says:

      In the face of yet higher costs of federal regulations, the research shows that small businesses continue to bear a disproportionate share of the federal regula¬tory burden. Appalling!!

    3. Ryan Thomas says:

      Ya, this is another absurd article trying to ram home an ideology rather than just logically. I own a small business (Gourmet retail market & catering, I have 35 employees and we net 4 % on 1.6 mil). Did you notice there were no specifics in the above article, NOT one specific regulation mentioned. I have almost no regulations. The PA Dept. of Agr comes in ONCE a year and inspects us for food safety. I tell them I wish they came in more, this way I know other restaurants in the area are clean as well.

      You know what kills us? The merchant fees I have to pay to the credit card conglomerates who have a duopoly on the interchange networks and use it to gouge people like me (Amex 3.25%. Visa/Mastercard 2.5% or about $4,000 last month out of pocket. We pay twice merchants in Europe pay b/c the banks control Congress). Yet I've never heard Heritage do a story on this b/c it doesn't fit their ideology.

      The other thing that kills in the payroll tax. Remember, this was increased by RONALD REAGAN. And, no, W's tax cuts on dividends and cap gains didn't really help small businesses. I know, shocking, he put a sign behind him that said it did??

      So people who believe this nonsense need to start thinking for themselves and Heritage should protect small business from large disgraceful conglomerates like the credit card co's. But that's not going to happen.

    4. George Colgrove, VA says:

      When something like Small business is so sucessfull and so hard to control, it is no wonder the federal workforce has a target on it. The federal government wants to be seen as the job makers – not the provate sector. And considering the federal goverment and its large sums of corporate federal contractors, they can say they are the biggest employers for their own egos. But the small business sector keeps beating them out.

      Also the federal government's current owners (those same large corporations) would also do well to have these small business diminish if it meant that they gain a larger market share.

    5. Roger S., Mass. says:

      All good comments! I would add that for most established businesses, big or little, regulations are all about keeping out upstarts — freshly founded businesses which could become major competitors. We see this everywhere, even at local levels of government, and the phenomenon isn't new!

      What to do? IMO it's really a matter of "business culture", if you will: the idea of running to one's favorite local political hack, every time a real or perceived threat arises, for some new ordinance which would/might help diminish it. Until that attitude (and practice) change, I see little hope for improvement. — Laws against it? Against any kind of lobbying? Not likely to work, for being practically unenforceable. Full disclosure of all lobbying activities? We have that today. Does it work?

      Unless all parties get over the idea that they need "special protection" for their favorite business activity, and until government at all levels begins to get the message that non-interference in markets and free market actions is the only way to go to empower prosperity and liberty — practically a cultural revolution at this point in time — these things are likely not to change!

    6. Bobbie says:

      We love small businesses and want the obstruction of unfair regulations lifted from their freedom to conduct businesses. We are not owners but support small businesses and will continue as long as we can. Thank you.

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