Opinion

The Great Debate

Why do New York politicians hate small business?

New York Governor Andrew Cuomo appointed a commission to figure out how to make the Empire State more business-friendly and change its reputation for high taxes. The New York state government is now running commercials on national television touting the tax breaks that businesses can get by relocating there. “Small Business Saturday” – the annual post-Thanksgiving event encouraging folks to patronize small businesses — was heavily promoted in nearly every media outlet.

However, there may be no place in the country that treats small businesses worse than New York. Harmful policies come out of both City Hall in Manhattan and the State House in Albany. The commercials, narrated by Robert DeNiro and set to Jay-Z’s iconic song, Empire State of Mind, may look cool, but what New York needs to make itself more conducive to investment, job creation and economic growth, is better fiscal policy. Not more glamour.

Though it’s great to see Cuomo own up to the fact that New York’s tax climate is inhospitable to employers — and events like Small Business Saturday are nice — this doesn’t change the fact that New York’s political class is uniquely hostile to small business. To the detriment of the entire state economy.

Step one is admitting you have a problem and Cuomo has done this with his commission. He has offered to waive taxes for businesses that set up shop in certain parts of the state, such as Albany. But then he signs bills that harm employers across the state.

If Cuomo, a 2016 presidential prospect, does decide to run, he might have trouble explaining the 2011 tax package he signed — if he makes it to the general election. Cuomo’s tax plan, as the Wall Street Journal described it, tossed out “the most desirable part of New York’s tax code, which is its relative flatness…The new code will include a ‘progressive’ ladder: 6.45 percent for couples earning between $40,000 and $150,000, 6.65 percent from $150,000 to $300,000, 6.85 percent from $300,000 to $2 million, and 8.82 percent above $2 million ($1 million for individuals).”

The regulatory cliff awaits

As President Barack Obama’s first term ends and second begins, it is an opportune time to reflect on the cost and sheer volume of new red tape his administration has created; analyze its impact on small businesses, and prepare for what’s next.

The Obama administration has pursued an active regulatory agenda. The overall regulatory burden is now $1.8 trillion annually, according to the Competitive Enterprise Institute, and this year alone new rules have added $215.4 billion in compliance costs. Small businesses are understandably concerned that the second Obama term will only add to this already heavy regulatory burden.

There has already been a wave of “economically significant” regulations ‑ those with an annual impact of $100 million or more ‑ that outpaced both the Clinton and Bush administrations. That pace slowed leading into the 2012 elections, but a second wave has been building.

Who truly speaks for small businesses?

Everyone knows that small businesses hate President Obama’s historic healthcare reform law, right? At least that’s what the nation’s leading small-business advocacy group would have you believe.

Joining 26 states, the National Federation of Independent Business challenged the law all the way to the U.S. Supreme Court in March. It claimed the “individual mandate” is unconstitutional and would bankrupt small businesses with unnecessary costs.

Yet while the NFIB claims its multimillion-dollar lawsuit is on behalf of job creators and small businesses everywhere, it’s unclear whether small businesses genuinely support the NFIB position. A close look at its record suggests that the NFIB uses the politically valuable mantle of small business to pursue an agenda that may take its cues from elsewhere.

Give the states the power to build jobs

By Muhtar Kent and Ram Charan
The opinions expressed are their own.

While the long-term fundamentals of our economy remain strong, America is struggling to recover from the Great Recession. With unemployment rising to 9.1 percent in May, we need more jobs, and we need them now. The good news is that we can create them by encouraging more small businesses and entrepreneurs to compete and win in the global economy.

Here’s the reality today: two out of three new American jobs are created by companies less than five years old. Small and medium-sized enterprises (SMEs) are powerful — indeed essential — engines of economic growth and job creation, not to mention tax revenues.

Unfortunately, not enough SMEs are geared toward competing internationally, despite the vast potential that exists in many global markets.

from Entrepreneurial:

Why America’s small businesses are becoming like banks

By Terra Terwilliger
The opinions expressed are the author's own.

Over two years after the start of the Great Credit Crisis, banks are still not lending money. But big businesses know exactly where to go for a quick, interest-free loan … the little guy. Even as corporate profits recover, big companies continue to squeeze their small vendors, stretching out payment terms and writing late checks. Unfortunately, this blatant exploitation is damaging the small business economic engine that drives half of US GDP.

A friend who owns a small consulting company recently received notice from a Fortune 500 client that henceforth their payment terms would be extended from 90 to 120 days. No discussion, no recourse, just a fancy legalese version of “we’re going to start paying you later because it’s better for us, so get used to it.”

That’s as if your employer casually one day sent you a letter saying that they were going to start paying you 30 days late. Unfortunately, you wouldn’t be able to tell your landlord, the gas company and the supermarket the same thing. Your bills still have to be paid on time.

Massachusetts vote a referendum on health care reform

Trudy Lieberman, a long-time health care and consumer journalist, is a contributing editor to the Columbia Journalism Review and has blogged about health care for cjr.org since the beginning of the presidential campaign. The views expressed are her own.

A few year’s back, a joke on the cocktail circuit went like this:  you know the world is  topsy-turvy when the best rapper is white; the best golfer is black, and the Germans don’t  want to go to war.  Tuesday’s vote in Massachusetts that sent Republican Scott Brown to the Senate taking over the seat held by Edward Kennedy for nearly fifty years produced a new twist to the old joke.

Things are indeed upside down when the advocates for a single-payer, national health insurance system supported a Republican.  On Sunday, one of those advocates, Diane Cooper Bridges, sent a letter to the president and to his adviser David Axelrod saying:

Obama fails small businesses

georgecloutier1 George A. Cloutier, a graduate of Harvard Business School, is the founder and CEO of American Management Services, one of the nation’s largest turnaround and management services firms specializing in small and mid-size companies. The opinions of George Cloutier are his own and do not represent those of the United States Conference of Mayors or Partner America. –

President Obama gets an “F” for his small business program. The SBA has guaranteed a paltry 50,000 loans  to the nation’s 29 million small businesses – that’s .0017. Loan volume is down 36 percent from 2008 and 50 percent from 2007. Obama and his advisers have actually done the unimaginable; they have reduced the flow of aid to small businesses in the face of a deep recession. The program’s bank lenders have left $15 billion on the table due to “regulatory problems.” Even an administration plan to provide lending to 70,000 vehicle dealers has no takers and failed.

Administration “experts” allocated less than 1 percent of the stimulus bill to small business. It’s mind-boggling that Washington ignores the biggest economic sector in the country employing 60 million people, producing 50 percent of GDP, and creating 70 percent of new jobs.

Quality early education: Good for kids and the economy

Joan Wasser Gish– Joan Wasser Gish is a consultant in the Boston area. A former senior policy adviser to Senator John Kerry, she recently testified before the U.S. Senate Committee on Small Business & Entrepreneurship. The views expressed are her own. –

When the toys are put away and the last youngster is picked up for the day, early childhood education providers like all other entrepreneurs sit down to assess their revenues, account for expenses and make difficult business decisions. And though their services are rife with hugs and games and songs, their work has serious implications for the economy. The child-care sector is a critical driver of economic growth and workforce development. That is why financial leaders and policymakers should do more to support providers as both educators and small-business entrepreneurs.

There are more than 400,000 licensed child-care facilities across the country. They span the economic sectors, with the majority run as sole proprietorship home-based businesses, and the rest split between for-profit and non-profit centers offering early education and care. Most are run by women, and a significant proportion are owned and operated by members of minority groups. Because of the early education and care services they provide, they contribute to both short- and long-term economic growth.

Women small business owners really need healthcare reform

– Nancy Duff Campbell is a founder and co-president of the National Women’s Law Center, one of the nation’s pre-eminent women’s rights organizations. A recognized expert on women’s law and public policy issues, for over thirty-five years Ms. Campbell has participated in the development and implementation of key legislative initiatives and litigation protecting women’s rights, with a particular emphasis on issues affecting low income women and their families. The views expressed are her own. —

Insurance companies and others who profit from our broken health care system are mobilizing to defeat comprehensive reform by using misinformation and scare tactics. A prime example is the allegation that healthcare legislation – specifically the plan being considered by the House of Representatives – will hurt small businesses.

The fact is that small business owners, especially women, are already hurting under our current healthcare system. Leah Daniels, 29, is the owner of Hill’s Kitchen – a gourmet kitchenware store that opened last May not far from the U.S. Capitol. Daniels can’t afford to offer health insurance to her three employees. She purchased her own bare-bones plan on the individual market for protection “in case I get hit by a car,” but not much else. It costs her just under $200 a month and doesn’t cover such services as routine doctor’s visits or maternity care. Daniels, who often works 7 days a week, says that she is constantly worried about getting sick.

Small businesses need bold, flexible relief package

- Lesia Bates Moss is president of Seedco Financial, a subsidiary of Seedco, a national nonprofit organization that helps low-income people and communities move toward economic prosperity. Any opinions are her own. -

As policymakers in Washington work to unfreeze the credit market and reinvigorate lending activity, much of the attention has fallen on the biggest lenders and the needs of major companies.

But on Main Streets across the nation, small businesses have also been hit hard by the recession and credit crunch. Unable to obtain affordable capital – and often in need of technical assistance to help them survive the financial tumult – many small businesses are closing their doors and laying off workers.

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