Opinion: Optimism boosts small-business growth

When the National Federation of Independent Business Small-Business Economic Trends survey was tallied in December, the optimism index among small firms soared four points to tie a 30-year-old record. What sparked that upbeat report? Expectations of good times ahead.

With all the challenges facing the nation, there is no better time to sweep away obstacles that prevent existing small businesses from growing and new ones from starting – and thus creating more jobs. That is the message small business is delivering to Capitol Hill as the 109th Congress begins to craft its legislative agenda.

It’s just common sense. To raise the optimism of small-business owners and those who want to start a business, the formula for success is simple: subtract the complex tax code, excessive regulations and frivolous lawsuits and add affordable health care.

For nearly two decades, taxes have ranked among the top concerns of small-business owners. According to The Tax Foundation, the total effective tax rate in 2003 – which encompasses the total tax burden from all levels of government – was more than 28.5 percent. Taxes on the average household are now greater than the cost of food, clothing, shelter and transportation combined.

Unlike the nation’s confusing tax code, the plea from small-business owners is quite uncomplicated. Plainly stated, they want Congress to simplify the code and reduce taxes.

Among the greatest burdens on small firms is having to decipher and comply with the current tax laws, which potentially challenge owners with 200 different requirements. It’s no wonder that more than eight of 10 small-business owners are forced to rely on professional tax practitioners to prepare their tax returns – a costly and time-consuming practice.

Optimism, and therefore small-business creation and growth, can also be sparked if Congress takes meaningful steps to reduce the load of excessive regulation and intrusive laws. Instead of devoting all their time to satisfying customers, these entrepreneurs spend an inordinate amount of their daily schedules grappling with unclear and confusing government instructions, a steadily growing mountain of paperwork and duplicate information requests.

That small-business owners have any optimism at all is somewhat amazing when faced with the fact that lawsuit filings have tripled in the past 30 years. Frivolous lawsuits and out-of-control, lottery-sized damage awards are steadily raising the threat to small firms. Within the past five years, more than one-tenth of owners have been sued or threatened with liability litigation.

Do you want to see small-business growth and job creation take off? Congress can make it happen by passing legislation to allow associations to offer health insurance to their small-business members, expand options for individuals to buy their own insurance, oppose health-care mandates and permit the self-employed to deduct health-care costs.

It’s a simple formula: Optimism plus entrepreneurship equals small-business growth.

Jack Faris is president of NFIB, a small-business advocacy group. A nonprofit, non-partisan organization founded in 1943, NFIB represents the consensus views of its 600,000 members in Washington, D.C., and all 50 state capitals.

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