The Microenterprise — Part One
The Microenterprise — Part Three
usinesses employing less than 10 persons -- i.e., three out of every four businesses in the United States -- feel helpless in the face of societal onslaughts beyond their control and understanding. As the nation's largest advocacy organization representing more than 440,000 microenterprises in this category, the National Federation of Independent Business has been speaking with an increasingly strong voice in the halls of Federal and State government to make known the concerns and fears of this substantial constituency -- a segment of our economy generating annual payrolls of $318 billion! Ironically, the NFIB Small Business Agenda addresses issues of importance to all businesses, although the immediacy of these issues fall especially heavily upon the microenterprise.
Regulatory Renewal: Regulations by the Federal and State governments, thousands of them unnecessary and counter-productive, impose an overwhelming burden upon the microenterprise. Even beneficial regulations have become so complex and require so much attendant paper work that the owner/manager of the microenterprise often finds it almost impossible to comply. And working for large overstaffed bureaucracies, many government regulators are arrogantly insensitive to the unique predicament of the microenterprise.
Amendment of the Small Business Regulatory Flexibility Act has been proposed to enable the smaller business to challenge government regulations in Court thereby making Federal agencies accountable for their regulations. The introduction of regulatory impact/cost benefit analyses has been proposed to ascertain the costs that would be imposed upon the microenterprise and the impact of the contemplated regulations upon jobs. It has further been proposed to enact "sunset" laws to retire and, if appropriate, to then reauthorize all government regulations every five years, thereby forcing the Congress and agencies to review the merits and effectiveness of each program before it can be reestablished. And the Congress has been asked to re-examine the FLSA, OSHA, ADA and other labor legislation to reduce their negative impact upon the very small employer.
Tax Overhaul: Among the obvious improvements in the Internal Revenue Code (now 1,339,000 words long) would be the fundamental simplification of tax accounting for the micro-business. Byzantine complexity is a major barrier to compliance, turning traditionally honest owner/ managers into unwitting tax evaders because they simply do not know or understand these convoluted tax regulations. Having to hire expensive tax accountants is an absurd burden to impose upon the micro-business. A new schedule of tax rates for capital gains should encourage risk-taking investments, job creation, and economic growth. The definition of independent contractor should be clarified to forestall debilitating disputes and audits with the IRS. The labyrinthine regulations governing retirement and pension plans should be streamlined to preclude the termination of these plans by the very small employer. And it has been proposed that the amount a business can deduct for the purchase of equipment in the year of purchase be increased from the present $17,500 to $100,000 thereby providing much needed tax relief, increased cash flow, encouraging investment, and eliminating confusing depreciation calculations.
Health Insurance: 2.8 million self employed Americans currently have no health insurance. This is where the greatest bias against the microenterprise may be found. Self-employed business owners -- e.g., sole proprietors, partners, and S corporations -- are now prohibited from deducting the cost of their health insurance as a legitimate business expense. Incongruously, this is an allowable business expense for C corporations. The Congress should allow the formation of private voluntary purchasing groups for health insurance across state lines to offer the microenterprise the same advantages available to major corporations -- viz., bargaining clout, administrative savings, and relief from state mandates or premium taxes. Insurance industry regulatory reforms are needed to make health insurance more accessible, portable, renewable, and affordable to the microenterprise.
These are some of the highlights of the NFIB Small Business Agenda. They reflect the concerns and fears being voiced by the owner/managers of microenterprises throughout the United States. This credo might be paraphrased as "the best thing the government can do for most people is to simply leave them alone" or to at least not impose clearly inequitable and discriminatory regulations upon those believed to be lacking a strong public voice. However, with 4,723,398 business establishments in the United States employing less than 10 persons, these microenterprises in unison can speak with a commanding voice. These reforms being forcefully advanced will assure business stability and survival, foster job creation, and even enhance tax revenues; they are indeed in the best interests of the United States.
Your comments and suggestions for these pages are most welcomed!
Revised: July 30, 2021 TAF
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