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8 Ways Politicians Can Help Small Business

Politicians of both parties claim to support small business--but if that's so, here's what they should really do.
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Politicians in both parties claim to be supportive of small business, but frankly I don't see it. The way I see it, if politicians really wanted to help small business, they'd do the following:

1. Stop making 'small business' meaningless.

When politicians talk about small businesses, they're usually including businesses that employ up to 500 people. Look, nearly everybody in my family owns or works for a small business--and none of them employ more than five people.

I'm sorry, but when your company gets big enough so that it can support a full-time accountant, it's not small any longer.  This is important because policies that favor companies with 500 people in them are usually not favorable to those that employ a handful.

2. Punish large companies that defect elsewhere.

Since it's a free country, there's no reason why a huge company (like Accenture or Halliburton) shouldn't relocate its headquarters to somewhere else in the world to avoid paying its full share of U.S. taxes.  However, there's no reason why the rest of the businesses in the U.S. should be forced to pay the taxes that the huge companies would otherwise pay.

Therefore, politicians should enact legislation that immediately stops the purchasing of products and services from companies that "defect" to another country; instead, direct that money to smaller firms that have remained loyal.

3. Be honest about 'free trade.'

The concept of "free trade" looks great on paper, but it's completely meaningless when your trading partners are manipulating currency to keep products artificially inexpensive.  "Free trade" is even more meaningless when your trading partners allow the creation of  supply chains that include forced labor.

Politicians should use the term "free trade" if, and only if, that trade is conducted on a level playing field. That's emphatically not the case today, and that fact has decimated the ability of small companies to compete in the manufacturing space.

4. Create a progressive business tax.

The U.S. currently has almost the highest business taxation on the planet.  However, it's only small firms that end up paying the full amount. Huge firms hire armies of accountants and play all sorts of financial hokey-pokey so that their tax burden is comparatively tiny.

Since it's probably impossible to keep huge companies from creating and exploiting loopholes, they should start from a higher base percentage--so that they end up paying proportionately as much as the rest of us.

5. Make corporate campaign contributions public.

Right now, huge companies can essentially "buy" politicians through unlimited campaign contributions.  Small business simply doesn't have the same clout. As a result, both regulation and de-regulation always tends to favor the interests of huge companies.

This undue influence would lessen if consumers and investors knew whom the huge companies were paying off.  Small businesses would benefit because blatant favoritism would be more difficult for the purchased politicians to hide.

6. Legalize (and tax) the drug trade.

The war on drugs costs this country billions of dollars every month and appears not to have had the tiniest effect on actual drug usage. The only beneficiaries of the current U.S. policy appears to be the drug dealers and cartels, public employees and their unions, and some huge private companies that run an insanely bloated prison system.

Ending this ridiculous war would free up money that could be used to reduce business taxes. What's more, legalization creates ample opportunities for small businesses, as has been amply shown in places where it's been tried.

7. Implement size-neutral health insurance.

This whole Obamacare/Romneycare thing just makes my head ache. I don't understand it and I don't understand how it's supposed to make things better. (Although I do have a friend who's alive today because of Romneycare.)

This much I do know: As things stand today, small businesses can't get the same rates as their huge competitors, which makes it proportionately more expensive for small business to keep workers healthy.

I really don't know how we get something better, but as long as the status quo remains in place, politicians aren't looking out for the interests of small business.

8. Educate more engineers.

Sometimes it seems like the higher education system in the United States is geared exclusively towards the creation of MBAs. With all due respect, small businesses don't need more MBAs--but they do need more engineers.

Unfortunately, because top engineering talent must now be imported, large companies are at a staffing advantage because they have the resources for the necessary immigration paperwork. Politicians should terminate current aid for business schools and put that money into programs that favor engineering schools.

Unless and until I start hearing mainstream politicians supporting ideas like the ones I've identified above, I'm going to continue to assume that they're still in the pockets of the big corporations--not small business.

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IMAGE: Big Stock Photo
Last updated: Aug 30, 2012

GEOFFREY JAMES | Columnist

Geoffrey James, a contributing editor for Inc.com, is an author, speaker, and award-winning blogger. Originally a system architect, brand manager, and industry analyst inside two Fortune 100 companies, he's interviewed more than a thousand successful executives, managers, entrepreneurs, and gurus to discover how business really works. His most recent book is Business Without the Bullsh*t: 49 Secrets and Shortcuts You Need to Know. If you enjoyed this post, sign up for the free weekly Sales Source newsletter.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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