Entrepreneurs came in for their share of praise in the President's speech last night. Some of what he proposed might even help you.
Speaking on behalf of the readers of Inc, the first thing we want to say in reaction to the President’s State of the Union speech is this: “Aw, shucks.”
Once again, the President--as well as his Republican counterspeaker, Representative Cathy McMorris Rodgers of Washington--elevated entrepreneurs to hero status, alongside teachers and wounded warriors. But while a little shout out from the floor of Congress is always nice, we think the State of Small Business would be stronger if Washington were to align its priorities with those of the entrepreneurs it claims to love and match its flattery with some useful action.
And while you can differ about the politics of, say, inequality and the economics of, say, the minimum wage, there were a few topics raised last night that entrepreneurs of any political persuasion should applaud. Here are three:
Immigration reform (loud applause): Both the President and McMorris Rodgers seemed to agree that the immigration system is a disgrace. The economy would undoubtedly be better off if business owners could hire the world’s best most highly-skilled engineers and scientific talent without jumping through bureaucratic hoops. At the other end of the payroll, other entrepreneurs would find life far easier if the work force of undocumented immigrants were allowed in out of the shadows.
Despite the apparent agreement between the parties, reform has consistently gotten snagged over the treatment of undocumented immigrants. Republicans want to unbundle policy changes regarding their path to legality or citizenship--about which the party is deeply divided--from that of highly skilled workers, whom everyone wants to welcome. Democrats, by contrast, insist on comprehensive reform, knowing that undocumented workers will enjoy reform only in a bill that solves both ends of the immigrant problem at once.
The good news: The Senate has already passed a comprehensive reform bill with bipartisan support. While the bill ran out of steam in the House, the House is likely to come back with its own legislation, and there is some hope that compromise is possible.
Tax reform (mild applause, mixed with skepticism): Since you probably pay taxes at a personal tax rate through your business’s pass-through structure, the President’s exhortations for a tax reform package that would lower the business tax rate wouldn’t directly make much difference. But anything that would streamline our ridiculous Tax Code and get the IRS out of your and your customers’ business decisions would energize the economy and give you back. Unfortunately, the probability of anything so politically delicate emerging out of today’s polarized Congress is vanishingly small.
Infrastructure investment (reluctant but resigned applause): This is controversial, since it activates the fundamental philosophical divide between the parties. The President and his party believe that rebuilding transportation and power infrastructure will not only make business more efficient but also will create jobs that could have beneficial effects on economic activity. The Republican attitude was well represented by this morning’s post by Inc columnist Gene Marks, which argued that the Federal government can’t afford to spend even on such seemingly necessary goals because it is too deeply in debt.
And yet, infrastructure is not an optional capital expense. Postponing necessary improvements only guarantees that they will be more expensive later. And if anything falls under the definition of a public good--one that benefits all citizens but that private industry is highly unlikely to tackle on its own--it is public infrastructure. If it makes your applause feel a little less forced, you can always remind yourself that the cost of financing these repairs through the U.S. Treasury--at a time when the 10-year bond costs just 2.7 percent--will cost taxpayers next to nothing after inflation. Sometimes, as any business owner well knows, you have to spend money to make money.
ERIC SCHURENBERG is the editor-in-chief of Inc. Before joining Inc, Eric was the editor of CBS MoneyWatch.com and BNET.com and managing editor of Money Magazine. As a writer, he is a winner of a Loeb and a National Magazine Award. @EricSchurenberg