Conservatives like to harp on how high corporate taxes and excessive regulations are killing small businesses, and the best way to create jobs is to cut taxes. But as an owner of several small businesses, I’ve always known that was a lie.
It is absolutely silly to think that businesses hire employees when their taxes are cut. Businesses hire employees when demand for their products or services go up, and they need additional employees to meet this demand. When a company’s profits go up (whether from lowered taxes or other reasons) they pass those profits on in the form of bonuses and dividends, as we have seen over and over again, not by hiring new employees.
So it is no surprise that a survey of random small business owners across the nation found the same thing. None of the business owners complained about regulation in their particular industries, and most seemed to welcome it.
As one owner put it: “Government regulations are not ‘choking’ our business, the hospitality business. In order to do business in today’s environment, government regulations are necessary and we must deal with them. The health and safety of our guests depend on regulations. It is the government regulations that help keep things in order.”
Some even pointed to the lack of regulation in mortgage lending as precipitating the financial crisis in 2007.
As for taxes, one owner said “I think the rich have to be taxed, sorry.” Many support closing corporate loopholes that would cause their tax bite to go up.
So if it isn’t taxes and regulations, what is hurting small businesses? According to the owner of four small businesses “What is choking my business is insurance. What’s choking all business is insurance. You cannot go into business, any business — small business or large business — unless you can afford insurance.”
22 Comments
So… We should lower taxes and regulations on the insurance industry then?
I am a biz owner, and I’m rich (from marrying into money). So, I actually could hire people to twiddle their thumbs, but I’m trying to be profitable, so I don’t. When I get more calls, then I will. Trickle down is is so unbelievably stupid, it needs to die.
Regulation of the insurance industry would be better.
The people who are forever harping tort reform fight tooth and nail against regulation for “understandable” bank and insurance contracts, and never mention usurious premiums.
Oh, and it’s a tree service, so yeah, insurance, that’s it right there…..
The comment about insurance is really interesting. I wonder what kind of insurance they were thinking of when they said that.
As a small business owner I would love to have a bit more demand, I’ve had to expand my product line in order to up sales, and would do more but can’t justify the return on cost. If I had the demand, I would hire. As for insurance, I’m lucky, I already have healthcare, if I didn’t I would be out of business. I still pay for liability insurance, nothing but a black hole.
Would anyone have heard of Paris Hilton had the government not built roads and airports? I doubt it.
It amazes me how small minded liberals always fail to get a simple concept. High taxes create more of a financial burden on ANYONE who actually pays them (less than 50 % of the population now). Ridiculous federal regulations do the same. As a small business owner I now have to keep a full-time attorney on staff just to sort through maze of 1000’s of regulations effecting my industry. Many competitors can no longer afford to stay in business and have closed their doors thus adding to the unemployment problem in this once great nation. Any business owner who thinks more regulation and higher taxes will help their business succeed is either A. lying about being a business owner or B. Flaming retarded in which case they would be right. They need big government to think for them.
TL: Your first 2 sentences are simply hilarious when paired together. I guess 50% of the population was handed a card that exempts them from payroll taxes, sales taxes, gas taxes, etc.
Or perhaps you were talking about the corporate tax structure, which currently allow some companies that reap huge profits to pay zero taxes, or even get paid money back by the government.
Clearly one of us is letting someone else do the thinking for them. Open wide my friend and let Fox News cram it all down your throat.
I am a liberal, and I have money to hire. Therefore lowering taxes for me does nothing. I need demand. Holy shit! I have never met a rich person who receives a tax break for being rich who wasn’t rich beforehand. And if they were rich beforehand, why didn’t they hire? I can’t figure it out, I must be very, very stupid.
I suspect TL Tipton is just a troll, but even if he isn’t he misses the point. It isn’t higher taxes that helps businesses succeed, it is the infrastructure that higher taxes buys. If those taxes pay for better education, then you get smarter employees. If those taxes pay for roads, you get lower costs to transport your products. If those taxes help restart the economy, then everyone benefits. Anyone who doesn’t get this should move to Somalia.
I just hope Sarah Palin doesn’t catch wind of his post and his “retarded” comment. Or does she only get outraged when it is the evil libruls disparaging the mentally handicapped?
Sometimes I forget how all these diverging plot lines work.
Profits are at a record high. Perhaps profits would even fall if the economy improved, because right now workers have no bargaining power.
1032, yeah, she just ignores those comments when they come from conservatives.
It makes more sense to put money in the pockets of the people who are going to create demand than the people who supply the products. Pushing money into business and making it cheaper to produce and ship goods is not going to help anything if the consumer isn’t able to purchase it. Instead of a business-friendly environment, we need a consumer-friendly environment, one that encourages people to increase demand for products, which will in turn force companies to expand, which creates jobs. Those newly hired people go out and spend their money, and the whole process starts over. It’s a great cycle of progress, but it has to start somewhere.
I have helped run a small business in the transportation industry for several years. The only regulations that “choke” our industry are those that come from duplicate agencies (gov’t) that overlap their jurisdiction, and the ones our industry has brought upon ourselves because of illegal practices (the industry; not our company). If people and companies were honest, ethical and moral, fewer regulations would necessary. However, we are not a more and ethical species.
Tipton’s comment that he needs a full time lawyer because of government regulation either indicates he doesn’t know what he is talking about, or he has a lawyer that has managed to hornswaggle him.
Virtually all regulations that impact businesses (other than taxes) only requre legal advice as a one time event when they are implemented, and again when they are changed. Based on changes you set new policy and then go on about your business. They dont require constant re-interpretation.
You may keep a lawyer on retainer to advise you of when the regulations change, but they certainly don’t spend that much time doing it.
As everyone else (and all economists) have already said, it is an extremely simple equation – businesses hire when there is demand. Period. Business taxes and regulation policies have virtually no impact on demand. What we need is more demand – which comes from a thriving middle class spending money, and from new products and services that create new demands. Everything esle is just a smokescreen to expand the plutocracy.
Besides all the business arguments, what I find interesting is that the media does not report this information. You never hear from small businesses about what would help them. What I read from the above posts was more illuminating than most of what’s reported in the media.
If most people understood the basics, they might have a different viewpoint. I would guess however that for something educational to actually make it to prime time it would need to be massaged or dare I say it, manufactured.
Wait, wait, wait… Are you all saying that when conservatives and trolls like TL Tipton argue that taxes and regulations are impeding small business growth – the main source of job creation in our economy – are you saying that they’re full of shit?
Color me consternated!
No one is saying that taxes and regulations don’t have the potential to be a burden on business. Despite what you might hear, the US isn’t heavily taxed or heavily regulated relative to the rest of the industrialized world. But that’s not the point. The right is using the unemployment situation to push for even lower taxes and even fewer regulations, which is good for profits. The way Congressional Republicans talk, it’s as if (and Bill Maher put it this way, quite humerously) the American economy is a chained beast, and all we need to do is take of that regulatory chain. That’s not the problem, the problem is demand.
You could have no taxes on business and no regulations at all, but if no one wants your goods or services, you’re not going to hire people.
They actually have no need for demand, or need for you to buy products. Once you reach a certain level of wealth, Wall Street can keep you running easily for the rest of your life. People don’t understand that you can make money in stocks no matter what happens. Plenty of people shorted stocks (meaning you make money when the price goes down) when the market dived a couple of years ago and they absolutely cleaned up.
If Apple went under tomorrow, the only people who would suffer are the lower and middle class people working there. The upper class people working there (the people who should be very concerned about you buying products) already make plenty of money to survive for several lifetimes.
If you look at the legislative climate and what’s being pushed down the pipe, it has only one ultimate goal: to keep the most money in the hands of the upper class who are the most heavily invested in markets. Everything else is a smoke screen. Deregulation, elimination of capital gains and dividends taxes, and elimination or reduction of corporate taxes. It is already very easy to make money when you have money, but anything that eases it more is golden. Take some time to investigate the monetary inequality in the country, but more importantly what percentages of the markets are owned by the upper class.
The fire is raging and they just want more fuel to dump on it. If they have to take your livelihood to do it, que sera sera. You should have worked harder. Or at least had richer parents.
The “survey” referred to is misleading, at best. The few small business owners interviewed were those fortunate enough to have some growth and the ability to hire a few employees.
My background in HR has been entirely with small business and I network with many other small business HR people and owners and regulations are hurting business. My findings are that three major components are keeping small business from hiring:
1. The lack of consumers utilizing or buying their products or services given the lack of disposable income.
2. The fear of government regulations specifically the Obama Health Care Plan and skyrocketing cost of WC insurance and unemployment rates.
3. The political climate.
For those who claim regulations are not hurting small business, think again!