They built it, so Hand’s Off Government
December 12, 2013
According to the U.S. Small Business Administration the 23 million small businesses in America account for 54% of all U.S. sales. Small businesses provide 55% of all jobs and 66% of all net new jobs since the 1970s, and the 600,000 plus franchised small businesses in the U.S. account for 40% of all retail sales and provide jobs for some 8 million people. With statistics like that, you’d think the U.S. Government would be bending over backwards to keep that growth going. After all, its major businesses like Hewlett-Packard, Ben and Jerry’s, and Walmart that started out as small businesses. But that isn’t the case.
According to the House Small Business Committee, Government regulations and red tape are a “tremendous barrier to small business growth,” and small businesses pay a regulatory compliance cost that is 36 percent higher than large businesses. An October of 2011 poll conducted by Gallup of U.S. small-business owners found they are most likely to say complying with government regulations (22%) is the most important problem facing them, followed by consumer confidence in the economy (15%) and lack of consumer demand (12%).
Rules impacting small business have increased over the past several years. At year-end 2012, overall rules in the pipeline (active, completed, and long-term) affecting small business according to federal agencies stood at 854. In fact, the number of rules with small-business impacts under Obama since 2010 has regularly exceeded 800. The last time rules in this category exceeded 800 was in 2003.
The president’s signature initiative is adding regulations to the already full pipeline and is affecting the nation’s small businesses. Starting in 2015, Obamacare will require businesses that employ 50 or more employees who work an average of 30 or more hours per week to offer health insurance – or pay a penalty. However, if a business owner owns stakes in multiple companies, it’s possible their employees may be lumped together according to IRS business aggregation rules, requiring the owner to provide insurance – even if none of the separate businesses has more than 50 workers.
With an economy still struggling to create jobs and reach pre-recession growth levels, the government and most certainly President Obama and the executive agencies he oversees are not helping matters. Compliance costs are increasing and that takes away valuable capital that would otherwise be used for expanding business. It’s time Congress and the president realize this fact and halt the onslaught of regulations and government meddling in the private sector.