Issues that small business owners care about--jobs, wages, and the economy--have factored heavily into the rhetoric of the 2016 presidential race.
Last night's Republican debate, which was often big on spectacle and short on substance, touched on many of these topics. But in the heat of the moment, the four remaining GOP candidates often made inaccurate or overblown claims (some of which repeated statements they've made previously on the campaign trail). Sometimes they just bent the truth.
Here's an attempt to separate fact from fiction on four subjects critical to entrepreneurs.
1. Obamacare kills jobs
"The way you create jobs is...to repeal and replace Obamacare."--Florida senator Marco Rubio.
There is little evidence that Affordable Care Act has put a damper on hiring or killed jobs, as Texas senator Ted Cruz also suggested. About 4 percent of employers that must comply with the mandate, which currently comprises those with 50 or more workers, reported switching some employees from full-time to part-time status, according to the Kaiser Family Foundation's 2015 Employer Health Benefits Survey from last September. Recent data from payroll processor ADP has suggested the impact of the ACA on hiring as been extremely small. And various academic research has found Obamacare may actually lead to an increase in entrepreneurship, by providing an impetus for people to leave their jobs and start businesses without fear of losing health care coverage.
2. The flat tax will create more small businesses
"We will pass a simple flat tax and abolish the IRS. And what that's going to do... is small businesses are going to explode. We are going to see millions of high-paying jobs. We are going to see wages going up. We are going to see opportunity."--Ted Cruz
Flat tax proposals typically favor the wealthiest taxpayers by dramatically reducing their tax bills, but they also add to the national debt. One of the debate's moderators, Fox News anchor Chris Wallace, said Thursday night that the flat tax proposed by real estate magnate Donald Trump would add $10 trillion to the national debt. Cruz, who also favors a flat tax, would add a so-called business transfer tax that would assess businesses throughout their production cycles. The conservative Tax Foundation has said the proposal could potentially increase business costs. Other critics of Cruz's business flat tax have said it could force businesses to increase their prices. Those issues in turn could discourage new business formation.
3. The H-1B program costs U.S. workers jobs
"The abuse of the H-1B program has been rampant. U.S. companies... are firing American workers, bringing in foreign workers, and forcing them to train their replacements."--Cruz
While there have been reports of large companies flooding the U.S. Department of Homeland Security with applications for highly skilled overseas workers, and there is litigation related to H-1B workers replacing U.S. workers at companies including Disney and Toys 'R' Us, such situations are not the norm. Silicon Valley startups typically say they can't find enough skilled U.S. workers to fill the engineering jobs they have open, which they say restrains growth. Startups and industry groups would like to increase the number of H-1B visas granted each year. Additionally, they would like to create a path to citizenship to keep more of these workers in the U.S. after the term of their visas expires.
4. Devalued currency in Asia makes it hard to manufacture in the U.S.
"They devalue their currencies, and they make it impossible for clothing-makers in this country to do clothing in this country. And if you look at what's happened on Seventh Avenue, and you look at what's happened in New York with the garment industry, so much of the clothing now comes out from Vietnam, China, and other places. And it's all because of devaluation."--Trump
China has devalued its currency, called the renminbi, since the summer. And other countries in Asia have followed suit, which makes the dollar stronger relative to their currency, as well as making U.S. goods and services more expensive to export to that region. It also makes goods from Asia cheaper to import to the U.S. But devalued Asian currencies may have little direct bearing on actual costs for U.S.-based manufacturers selling domestically, according to some small business financial experts. What's more, only 6 percent of Asia's imports come from the U.S., according to recent research from Third Way, a nonpartisan think tank. Small U.S. manufacturers largely sell their products in North America, according to the International Trade Administration.