How to Fix the Economy by Fixing Business

Our economy and small businesses need a jumpstart.  We all should be concerned over the fact that small businesses are being destroyed faster than they are created.  Small businesses are at the heart of the U.S. economy and 70% of all new jobs in the U.S. are created by small businesses.   In order to jumpstart the economy, we need to focus on making sure small businesses can make it and flourish.  Here’s how we do it in 4 easy points.

  • Significantly lower or end business taxes
  • Cut  red tape and regulations
  • Stop creating damaging laws that make life harder for small business owners
  • Reduce government spending

Taxes for small businesses are probably the biggest killer.  Essentially, all business taxes are another tax on all of us.  This is a difficult concept for many people to understand because they believe all taxes are good.  Most small businesses pay a considerable amount in taxes.  There are several types of taxes that they pay like income, payroll, insurance, healthcare, and other items.  Payroll taxes are paid each time we pay an employee.  Payroll taxes are due at specific times for each company.  The larger your company gets, the quicker you have to pay the payroll taxes.  Businesses get a hefty fine for paying these taxes late even if they don’t have the money to pay it.  This fine comes even if they are two weeks late on the payment and it is usually accompanied by a very nasty IRS letter that threatens to take the money by force.  To understand why this affects businesses negatively is because sometimes the businesses are waiting for money to come in for work they did and are paid slowly or they had to use that extra payroll money to pay for the employees salaries just to make payroll and not lose their employees.  The other bad part about payroll taxes is they have to be paid even hasn’t generated a profit and must pay the employees to stay in business.   If a business draws from their credit line and pays the employee, it is taxed on that money.    On top of payroll taxes, businesses get taxed on what they earn.    For everything that is paid out in taxes, small businesses get very little back from the government if anything at all.  The ROI on the payout is not worth it.  Businesses need that money to hire, innovate, and keep the business running and it should not be taken away in taxes.   Because businesses pay more than the average American in taxes, shouldn’t they get more benefits from the government?  By paying more should they get more access to the infrastructure and roads than anybody else?   Unfortunately, that is not the case and they continue to get taxed more and more every single year.

Businesses are no longer free to run the businesses as they see fit.  There are so many laws and regulations associated with businesses that not only don’t make sense, but are counter productive to building the business.  Here’s just one example of a draconian business regulation.   A contractor is an employee that is hired from outside who gets paid by the hour to work.  A full time employee gets paid on the job and comes with a lot more restrictions for businesses.  The minute the employee becomes full time, the business is responsible for all the taxes associated with the employee at that time.  When it comes to contracting employees and full time employees there are a lot of problems in that area when it comes to red tape.  Some businesses are “contract only” businesses and get paid when they complete contracts for businesses.  Other businesses are product based businesses that have a product to sell.  It doesn’t make sense to hire people full-time when the business itself only gets part-time work.   Unfortunately, one of the regulations from the government forces you to hire the employees after a certain period of time whether you can afford it or not.   This can cause a problem for the owners of the businesses as they find themselves working 18 hour days just to keep up with the work load when business is busy and starve or go into debt when the cash isn’t coming in.   This means that you could go through slow periods of time and to stay alive as a business you are forced to pay the employee as well as payroll taxes.  The only way to survive during a scenario like this is by using a credit line.  In other words, it makes you go into debt to maintain your employees  because of non-friendly business laws.  Removing the majority of the restrictions and laws like these for small businesses would go a long way to help us run the companies as we see fit and innovate without killing jobs.

As if it weren’t hard enough, the government has started with new laws that negatively affect small businesses.  This last year alone 2500 new regulations appeared.  The healthcare law is another red tape law that is negatively affecting many of us who pay for our own insurance and we don’t know what is going to happen with the government.    The part that has affected many of us business owners is the health care law forces us to get more expensive insurance that we don’t want and don’t need as well.  The extra money we lose from it is generally used and contributed to building the business or feeding our own families.  Most of us were happy with our previous plans and would more than willingly go back.  Every year we get new unnecessary regulations and now this year we’re all fighting against the voting public for a law that will hurt business again called “The Minimum Wage Increase”.  Why not let competition play out like it did for the IT industry?  Competition in business works and we should stop stifling it with the pretense that government involvement is beneficial.

Reducing government spending is essential to move this nation forward.  We need to cut programs and spending.  Too much money is wasted on pension plans, healthcare programs, and a myriad of other programs.  Too many programs are failures and need to be reduced or cut altogether.  Most of the private sector don’t have retirement set aside because of all the wasteful spending with our tax dollars.  Isn’t it about time we started cutting the public programs that don’t make sense?   We need to be compassionate to people, but we also need to be wise and realize when we cannot keep supporting ideals that will hurt everybody in the U.S.  We can’t keep spending in government like we are and think that everything will be ok and that we’re “doing the right thing”.  In order to preserve our freedoms and our future, we need to stop the out of control spending.  It’s time to reduce government spending to help innovation, creation, and help America become the great nation it used to be.

Too many people who don’t know anything about business are those proliferating articles that not only don’t make sense economically and are damaging to the economy and small businesses.   There are far too many people out there who think businesses are sitting on a big pile of cash and they are just hoarding it.  The writers of those articles and blogs are lying and are being deceptive.  It is making many people hate the rich and hate business owners because they don’t think like what they have to say.  Don’t the rich have just as much right to be here as the poor?  Bad people are pushing an agenda and not being honest about what is happening out there.  Time to stop that practice.  If you read an article that pushes those practices, close the article or post a negative comment on the site.

We all want a better future for America.  The only way to do that for me, you, and our children is to start being wise and fiscally responsible.  That means making sacrifices and not paying the way for some people that should be.  Our government isn’t going to be the method that will help us become fiscally responsible.  It’s up to each of us to do our part to make it happen.  We’ll all have more freedom if we help our small businesses thrive and flourish.  It’s time for real change.

For more facts on small businesses, take a look at this article.  Lets focus on our future and saving it.  We’ll never tax our future into a better one.