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What Does Small Business Want?

According to the US Chamber of Commerce [a wholly owned subsidiary of multi-national corporations] and the National Federation of Independent Businesses [generally Republican business owners based on PAC donations by NFIB] small businesses would be doing more hiring if it weren’t for all of the Federal regulations and high taxes.

Well, McClatchy decided to commit some journalism: Regulations, taxes aren’t killing small business, owners say

WASHINGTON — Politicians and business groups often blame excessive regulation and fear of higher taxes for tepid hiring in the economy. However, little evidence of that emerged when McClatchy canvassed a random sample of small business owners across the nation.

“Government regulations are not ‘choking’ our business, the hospitality business,” Bernard Wolfson, the president of Hospitality Operations in Miami, told The Miami Herald. “In order to do business in today’s environment, government regulations are necessary and we must deal with them. The health and safety of our guests depend on regulations. It is the government regulations that help keep things in order.”

As a small business person, I can tell you that I spent almost no time dealing with the Federal government over anything. The state and local governments, OTOH, created problems to be overcome, but as one of the people in the article mentioned, insurance was the biggest headache you deal with – you have to have it, and it never goes down.

Taxes aren’t an issue for small business people, because they are constantly re-investing in their company, and that isn’t taxed. The paltry sum they actually pay themselves, when they can, will never be affected by raising taxes.

For those who don’t know, because they have never read any of these ‘terrible regulations’, the Feds aren’t interested in you if you actually are a small business, unless your business requires Federal licenses [gun dealers, for example], or is involved in interstate commerce.

11 comments

1 Badtux { 09.03.11 at 2:53 pm }

How dare McClatchy bring, like, actual facts into this discussion! That’s a clear sign of their liberal disdain for conservatism. After all, everybody knows that those silly “fact” thingies have a liberal bias!

– Badtux the Snarky Penguin

2 Badtux { 09.03.11 at 3:04 pm }

BTW, the biggest expenses faced by small businesses are:

1) Payroll (*the* biggest, accounts for 70%+ of a typical small business’s expenses)
2) Materials/supplies
3) Rent
4) Insurance

n) Taxes

Taxes just aren’t on the radar for most small businesses. We did a study here in California and found out that taxes accounted for less than 2% of a typical small business’s expenses, since most of the money that came in went out in deductible ways, whether insurance/rent/materials/payroll or reinvesting into the business (which is problematic only for larger businesses that exceed the instant depreciation cap, for small businesses it’s rare that you’ll exceed the cap of $500K and have to depreciate your capital expenses over a number of years).

Oh wait, I just talked like a person who, well, has actually run (and worked for) small businesses. My bad! Bringing reality to this discussion clearly is just liberal lies and thus to be dismissed in traditional Sgt. Shultz fashion :twisted:.

– Badtux the Snarky Penguin

3 Bryan { 09.03.11 at 4:53 pm }

State and local taxes were the vast majority of my tax bill when I was in SoCal, the Feds didn’t make enough to cover the cost of printing their forms.

Corporations who are geared for maximizing profits over everything else are the ones who are complaining about taxes. If they want to reduce their taxes they could just invest in their own business, instead of milking it for every penny, but it would be harder to justify their absurd executive salaries and bonuses.

My biggest expense for compliance with an environmental regulation was printing off a couple of signs warning people about the chemicals used in my copier and some of the printers. Some of my neighbors said I should have included my coffee on that sign, but they were wimps who couldn’t handle military/police coffee.

Actually the sign thing got political because it was a co-op/condo office park. The ‘executive board’ didn’t like signs in windows, and wanted people to put up a large sign at the entrance. When the owners found out what that sign would cost, the board was told to stuff it and everyone used the sign I printed off on the LaserJet.

As far as I know, small businesses join local civic groups, like the Lions or Rotary, the Better Business Bureau, and the local chamber of commerce, not national organizations. The dues are too high for the national groups and they don’t provide any real return.

4 hipparchia { 09.03.11 at 6:27 pm }

as a small business person wannabe, i can tell you that both times i looked at expanding from sole-proprietorship to small employer it wasn’t taxes, it wasn’t regulations, it wasn’t wages… it was the insurance that made me change my mind.

5 Bryan { 09.03.11 at 7:36 pm }

You pay an arm and a leg for workman’s comp in Florida, and if an employee is injured on the job, they will raise your rates and do everything possible not to spend any money on your employee.

6 hipparchia { 09.03.11 at 9:25 pm }

You pay an arm and a leg for workman’s comp in Florida, and if an employee is injured on the job, they will raise your rates and do everything possible not to spend any money on your employee.

yep, all of that and more – if you’re just starting out, with no track record, you have to buy your workers comp insurance from the high-risk pool and you have to pay soething like 6 months premium up front, all at once. there were some other insurance jaw-droppers in there too as i recall, but that was the decision point on my first attempt.

the second time, i almost went into partnership with someone who had the requisite ‘track record’ for lessening some of the insurance [and some other] obstacles, but ultimately decided that i neither liked nor trusted that person enough to become legally entangled with them. not to mention that i don’t play well with others. 🙂

7 Bryan { 09.03.11 at 10:16 pm }

Have noticed how all of our current problems seem to revolve around the insurance industry? Even the credit default swaps are a form of insurance, and that was the justification for TARP and bailing out AIG.

Health care, hiring, finance, housing … everything goes back to insurance.

8 hipparchia { 09.04.11 at 8:12 am }

yep. from the article you linked:

Then there’s Rip Daniels. He owns four businesses in Gulfport, Miss.: real estate ventures, a radio station and a boutique hotel/bistro. He said his problem wasn’t regulation.

“Absolutely, positively not. What is choking my business is insurance. What’s choking all business is insurance. You cannot go into business, any business — small business or large business — unless you can afford insurance,” he told Biloxi’s Sun Herald.

9 Bryan { 09.04.11 at 12:59 pm }

He’s in Biloxi, so his property insurance is probably higher than any his mortgages and property taxes combined. Then you throw workman’s comp and liability on top of that, and the insurance bill can be your largest ‘unproductive expense’ [things not directly related to you ability to produce your product or service]. Insurance is the cost of being a business, rather than doing business.

10 Online Printing { 09.07.11 at 10:56 pm }

The rising cost of health insurance should be a primary focus for the federal government. I don’t mind regulations that require health insurance for employees, but when the insurance companies are making billions and still increasing rates… well that’s simply too much! Again, small business owners get the short end of the stick.

11 Bryan { 09.07.11 at 11:13 pm }

The insurance companies are ripping off small businesses in every product they sell, because state and local governments, as well as some contracts require that a business have certain types of insurance. There is never a decrease if you don’t make any claims, but the rates go up on a regular basis.

Insurance companies can afford lobbyists, and small businesses can’t.