It's My Party
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A successful company rarely changes its CEO, but countries are not companies. Bill Clinton will step down as President of the United States in January, as required by the Constitution. You can love him or hate him, credit him with the current economic climate or not, but the fact remains that the U.S. economy has boomed through the eight years of the Clinton Administration. Entrepreneurs have been able to launch companies and succeed in this environment to a dazzling degree. So who can keep this party rolling?
That's the question on the minds of entrepreneurs as they judge the two leading candidates to replace President Clinton. Fortunately, Vice President Al Gore and Texas Governor George W. Bush seem to understand the special needs of entrepreneurs. "Both Bush and Gore are sympathetic to the entrepreneurial spirit in America," says Bennie L. Thayer, president and CEO of the National Association for the Self-Employed.
Part of that understanding may come from their backgrounds. Gore worked on his family's farm as a child and teenager, and then bought his own farm in Carthage, Tennessee, with wife Tipper in 1973. (It's fair to note, however, that he is more the gentleman farmer, having worked as a newspaper reporter and politician since leaving the Army.) Bush worked in the oil business for 11 years starting in 1976 and then was the managing general partner of Major League Baseball's Texas Rangers (not exactly your typical start-up).
Freelance writer Chris Sandlund is a former editor of Success and Home Office Computing magazines. He worked as a legislative aide in the U.S. Senate covering tax, trade and banking issues from 1985 to 1987.
The Two Opposing Candidates
But business experience isn't all these guys are about. They're politicians, so judge them by their political records.
Gore spent 16 years in the House of Representatives and the Senate. His ratings by the U.S. Chamber of Commerce and National Federation of Independent Business were never very high. He voted with the Chamber an average of 30.4 percent and with NFIB an average of 32.1 percent during his congressional terms. Still, he supported such small-business efforts as 1992's Small Business Research and Development Enhancement Act while in Congress.
Gore's campaign, unsurprisingly, is running hard on the economic success of the Clinton-Gore years, and Gore cites the expansion of the SBA loan program to $14 billion in guarantees in the budget for the 2000 fiscal year. At the same time, he reiterates the economic policy pursued by the administration from 1993 forward: Reduce the budget deficit to lower the federal government's impact on financial markets so more money is available for investment. It's worth noting that credit availability topped many lists of entrepreneurs' concerns four and eight years ago. Today, it's rarely mentioned.
Meanwhile, Bush has been busy improving the Texas business climate. He has cut taxes and approved tort reform that has lowered entrepreneurs' insurance costs. "[Bush and Texas legislators] eliminated 170,000 small businesses from having to file franchise tax returns," notes David Pinkus, president of Small Business United of Texas.
Pinkus notes the fact that Bush tends to treat small and large businesses even-handedly. In other words, entrepreneurs will get a fair shake but shouldn't expect special treatment in a Bush administration. As governor, he opposed legislation that would have create a small-business advocate because he worried it would increase the overall size of state government.
But politicians' past efforts only partially sway voters. Elections are about the future. This guide seeks to sort through candidates' claims and counter-claims about the five issues that most reflect entrepreneurial concerns, according to several sources, including a March 2000 poll conducted by TNS Intersearch of 1,122 entrepreneurs for American Express Small Business Services (for more information, see "It Matters To Us").
Those results are combined with opinions from Washington, DC, small-business lobbying organizations: the U.S. Chamber of Commerce, National Small Business United (NSBU), National Association for the Self-Employed (NASE), National Federation of Independent Business, and Small Business Survival Committee.
Entrepreneurs, however, tend to make up their own minds. To help you do just that, each candidate's proposed policies for some of the most pressing concerns follow:
Issue 1: Finding Qualified Workers
If finding capital was one of the biggest issues for entrepreneurs in the past two presidential elections, finding qualified labor is the most pressing concern today. "It's the work-force issues that are at the top," says NSBU president Todd McCracken. "That's not only true of the American Express survey; it's true of every other survey I've seen."
One of the most generally accepted problems: Young people aren't coming out of school qualified to work. Both Bush and Gore favor establishing higher standards and charter schools and ex-panding savings accounts to help pay for education. However, Bush leaves the decision-making at state and local levels. Gore favors more federal funding, especially to pay for school construction and classroom computers.
With far more relevance to current employees, the vice president wants to make learning (hence, worker training) a lifelong process. He proposes a 401(j) savings plan that would be similar to the 401(k) retirement plan. The new program would fund kids in college or parents adding skills for current jobs. Better still, employers could contribute to the tax-exempt accounts. Bush wants to increase deductions for education savings account from $500 to $5,000, but makes no mention of employer contributions.
Bush also sees a second way to increase the number of qualified workers: Increase the labor pool. He offers two plans to do so: Eliminate the Social Security earnings test that limits seniors from re-entering the workforce, and increase the number of H-1B visas (currently 115,000) to allow more trained foreign workers into the country. Gore supports increasing the number of such foreign workers to more than 200,000.
What's your beef? "Loud And Clear" shows you how to complain your way up to Washington.
Issue 2: Making Health Insurance Affordable
Gore took the early lead in health care one year ago, when he proposed that small businesses be allowed to group across state lines to purchase health insurance as health-care purchasing coalitions. "Pooling is something that has worked well at a state level," says Bill Miller, political director for the U.S. Chamber of Commerce.
Gore wants to provide a 25 percent tax credit for the cost of each employee that a small business covers after joining such a plan. The associations promoted by Gore, however, are not the Association Health Plans (AHPs) advocated by some small-business advocacy groups. Gore feels that, because AHPs would be exempt from state regulations, these plans would not carry as many options as traditional insurance offerings.
Bush supports the AHP concept and adopted it into his health-care proposal in April. Bush also wants to make medical savings accounts (currently a trial program) permanent and allow employers to contribute to employees' accounts.
Currently, the law limits the deductibility of long-term health care for the self-employed (60 percent until 2001, 70 percent until 2003, 100 percent after 2003). Long-term health policies have a sliding scale for the maximum amount that, like other health-care insurance, is 60 percent deductible this year. At press time, only Bush favors changing current law to let business owners deduct all of their health insurance immediately, as opposed to waiting until 2003. Gore is heavily in favor of creating a $3,000 credit for long-term care.
Issue 3: Cutting Taxes
Bush has made tax cuts the centerpiece of his campaign. He wants to cut the top-marginal personal tax rate to 33 percent from 39.6 percent. His rationale: Encourage entrepreneurship. He also is in support of a permanent research-and-development tax credit and continuing the moratorium on sales taxes for Internet purchases through at least 2006.
According to the small-business lobby, support for reforming or eliminating the estate tax is more important. "Even if you do get the insurance and hire the lawyers [to make a plan for the tax], that's a huge amount of money that could have been invested in the business," says McCracken. Bush supports repeal of the tax. At press time, Gore has come out in favor of raising the family exemption for small businesses. He says that will allow 70 percent of small businesses to pass from one generation to the next without incurring any payment of the tax. At the time that this article went to press, the real nuts and bolts of Gore's plan were still rather sketchy and unclear.
The Gore campaign is primarily playing up tax cuts made during the Clinton administation for entrepreneurial businesses but, in terms of any cuts that Gore has came out in support of for the near future, he has only proposed substantially relief of the estate tax, as well as New Markets and Empowerment Zone credits, research and experimentation tax credits and, lastly, making the R&D tax credit permanent-setting in stone an already existing tax break.
Issue 4: Reducing Government Regulations
Eliminating red tape is a major campaign issue for entrepreneurs. "We're in a good economy right now," says Small Business Survival Committee president Christopher Wysocki. "Small businesses are working hard to succeed. They want to be left alone."
Gore helped make reducing regulations the centerpiece of the Clinton campaigns, and he's won plaudits for his efforts. "That's an area where we'd give him a strong plus," says NASE's Thayer. The vice president's campaign touts such efforts as the signing of the Small Business Regulatory Enforcement Fairness Act. Without many specifics, he promises more of the same.
It's fair to note, as NSBU's McCracken does, that regulatory relief under the Clinton administration has come mainly from the enforcement side. The policy side of most agencies, however, remains active.
Bush has one clear regulatory policy on his agenda: a federal version of Texas' Sunset Review Board. This state oversight panel reviews each government program once per decade to see if it still has a job to do and whether it's doing that job effectively.
Getting all riled up about politics? Read about Jesse Ventura, someone that really gets down and dirty, in "Wrestling With Reform."
Issue 5: Reforming Social Security
After years of being the third rail of American politics, Social Security is now finally up for serious discussion. Entrepreneurs, who pay half their employees' payroll taxes, recognize this as an opportunity to address the need for improved retirement policies for small firms.
"Most of our membership did not have more than $50,000 saved for their retirement," says Thayer. "That's indicative of most entrepreneurs." An improved Social Security system could provide the retirement that owners want for themselves and their employees.
Bush kicked off the debate by not accepting common wisdom to leave it alone. He recognizes that the government needs to guarantee existing benefits for current recipients and those "near retirement," and also plans to put Social Security surpluses into the trust fund to ensure its future solvency.
However, Bush also wants to allow individual workers to tap their payroll taxes for use in private investment accounts. He wants workers to get the greater long-run returns available from stocks and bonds, rather than the measly 2 percent return currently paid by Social Security. Would that mean workers would have to trade reduced benefits from the Social Security Trust Fund for the right to invest? Bush had not filled in the details by press time.
Gore wants to keep the existing Social Security system pretty much as it is-except with increased benefits for widows, widowers and mothers who've spent years raising kids. Gore's proposal would dedicate the Social Security surplus to reducing the national debt and creating interest savings to be applied to the Social Security trust fund, keeping the program fiscally sound through at least 2050. The vice president recognizes the need for additional savings, however. In June, he proposed Social Security Plus--a voluntary retirement system to supplement existing Social Security. It does not reduce or redirect payroll taxes.
But this position, and any other, is subject to change as Gore and Bush tack between competing interests in their race for the presidency. Plan on turning to the Internet for the latest updates. (See "Parties Online" below.) Read the fine print, because entrepreneurs tend to get lots of praise but few concrete policy proposals.
Whether Republican or Democrat, voting for a president goes beyond party lines when you take into account whose policies will help your business grow and succeed. Take a close look at the candidates--you may be surprised at whose ideas you favor.
In 1996, the presidential campaigns finally started tapping the power of the Internet to get their messages out. In 2000, both Democratic and Republican campaigns have developed extensive Web sites to put out their policies . . . and hype. The best way to keep abreast of breaking developments is to read the politicians' speeches rather than rely on the broadcast networks' interpretations. Better still, the "Find" feature on most Web browsers lets you skip to the heart of the matter by searching for the first reference of "small business" or "entrepreneur" in a lengthy spiel.
Though the spin-meisters don't exist on television alone, the following sites can help you gather more information to make an educated choice:
Vice President Al Gore's official campaign site: www.algore2000.com
Governor George W. Bush's official campaign site: www.georgewbush.com
U.S. Chamber of Commerce's campaign site: www.chamberbiz.com/government/politics.cfm
CSPAN's campaign site: www.c-span.org/campaign2000
PBS Democracy Project: www.pbs.org/democracy
CNN's campaign site: www.cnn.com/ELECTION/2000
The Los Angeles Times' campaign site: www.latimes.com/news/politics/elect2000/pres
The New York Times' campaign site: www.nytimes.com/library/politics/camp (requires free registration)
The Washington Post's campaign site: www.washingtonpost.com/wp-dyn/politics/elections/2000
It Matters To Us
NS Intersearch polled 1,122 entrepreneurs in March for American Express Small Business Services to find out what was on the minds of entrepreneurs heading into the presidential election. As this story goes to print, it remains the most comprehensive independent snapshot of entrepreneurial concerns. The 10 most important issues are:
1. Improving schools/training young people for work
2. Affordable health care for employees
3. Affordable health care for business owners
4. Tax cuts/tax reform
5. Reducing government regulations and paperwork
6. Interest rates
8. Reducing the budget deficit
9. Reducing estate ("death") taxes
10. Reducing Social Security/payroll taxes
Interview With Gore Part 1
Entrepreneur:Mr. Vice President, your campaign material consistently touts the results of economic growth under the Clinton administration as reason that small businesses should support your candidacy. However, voters will also cast their votes based on how they view the future. What issues do you view as key impediments to small-business growth in the near future? What specific policies do you propose that the country pursue to address these concerns?
Al Gore: Since the Clinton-Gore administration took office in 1993, this nation has enjoyed unprecedented prosperity. We fought hard to maintain fiscal discipline and invested in our people. Together with Americans' hard work, those policies have helped to create over 21 million new jobs, along with historically low unemployment, inflation and interest rates.
I know small businesses and entrepreneurs have been the real motors of our economy. Small businesses and entrepreneurs are responsible for an estimated one-third of America's historic economic growth. Also, small businesses (those with fewer than 500 employees) currently employ 53 percent of the private workforce and account for 47 percent of sales and 51 percent of private sector GDP. You've had a real partner in the Clinton-Gore Administration. The Administration has worked with the Small Business Administration to guarantee $59 billion in loans to small businesses, more than the previous 12 years combined. And the results are telling. Under the Clinton-Gore administration, small-business incomes have increased by 14.2 percent, vs. falling by 1 percent during the Bush administration.
But we can do more to give small business the kind of sustained attention necessary to ensure continued growth. As president, I will work harder than ever to strengthen and create new opportunities for entrepreneurship. To help small businesses prosper, my strategy will focus on helping small businesses gain access to capital and technical assistance and creating unlimited possibilities for small-business success, while continuing to streamline the regulatory process.
To begin, I believe that the right policies can help open more doors for small businesses. I want to facilitate the use of the Specialized Small Business Investment Company Tax Credit and double the New Markets Tax Credit to help small businessmen and women gain access to needed capital. I think it is smart policy to help small business obtain secure domestic loans. I plan to make sure that the SBA guarantees up to 80 percent of a loan made by a lender to creditworthy small businesses that cannot otherwise secure financing on reasonable terms. I also intend to continue opening new markets for small-business exporters. We can do that through granting more international trade loans and bolstering the SBA's Export Working Capital Program. Further, I want to ensure small businesses are not left behind due to momentary capital flow difficulty. Through the SBA's Y2K Action Loans and DELTA loans, we can alleviate these temporary burdens.
We can also continue to provide tax cuts and other financial incentives to encourage the development of small businesses in traditionally disadvantaged areas. Efforts such as Empowerment Zones and the New Markets Initiative are working, and I will fight to expand and implement funding for them. And I want to explore new strategies to help these risk-takers to connect into their larger local and regional economies.
I also want to help keep small businesses on the cutting edge of high technology. As president, I will work to grant more Technology Transfer awards and expand the Innovation Research Program for high-tech small-business research and development. We also need to assist small business in transferring over to technology-based operations. That is why I will continue to support the SBA's Community Express program, directing loans, technical and management assistance to businesses in New Markets areas.
We can also help by creating more opportunity for small businesses, starting by bringing together every sector of the business community, large and small. I want to expand the innovative BusinessLINC, which allows entrepreneurs and small businesses to better work with larger businesses to expand investment. I also intend to offer small businesses more bid opportunities for federal government contracts.
We have made great strides through the SBA's HUB Zone-Empowerment Contracting Program, and as president, I will ensure that we strengthen it. I want to give more managerial aid and other assistance to new small businesses by greatly upgrading Microenterprise Lending and Technical Assistance and the SBA's Business Development Centers, One-Stop Shops and Individual Development Accounts.
Small businesses also need a regulatory environment that does not create undue compliance burdens, while protecting consumers, workers and [the] environment. Over the last eight years, we have made good progress and worker related injuries are at an all time low. As president, I will build on recent successes and direct OSHA to continue seeking ways to improve employee health and safety, with little cost or confusion to small businesses. I will also continue to ease the tax burden on small business - including by increasing the estate tax exemption for small businesses. In the process, we can create greater business incentives and encourage more small business investment.
Small-business entrepreneurship is the backbone of the American Dream. Entrepreneurs put Americans to work. By putting the right policies in place today, we can help protect our current prosperity and extend it well into the 21st Century.
Entrepreneur:In your health-care announcement last September, you mentioned that small businesses should be able to band together to purchase health insurance in pools. You also proposed that businesses joining these pools should receive "special tax benefits and grants." Please elaborate on how these purchasing pools would operate and what sort of tax breaks small businesses would receive.
Gore: America has far too many people without health insurance. I have laid out a detailed, step-by-step plan to move toward our goal of universal health insurance, starting with children. One component of that plan is to help small business provide health care for their employees.
Small businesses typically pay higher premiums for benefits, and administrative costs may consume as much as 40 percent of premium dollars. To counter this excessive burden, I have proposed an initiative to give small firms that offer health insurance a tax credit equal to 25 percent of their contribution towards health insurance obtained through purchasing coalitions. These health insurance pools allow small businesses to join together in order to purchase insurance policies at a reduced price.
Further, I would provide tax incentives for foundations to help pay for start-up costs of purchasing coalitions and direct the Federal Employees' Health Benefits Program to make technical assistance available to these coalitions. Above all, this process not only saves money, but helps move toward our goal of universal health coverage for all Americans.
Entrepreneur:Small businesses consistently cite the shortage of skilled labor as a major problem. They view part of that problem as related to worker education but lack consensus on the proper approach to rectifying the situation. What specifically would you do to improve the preparation of students coming out of high school? How do you propose to improve continuing education for existing workers?
Gore: In my opinion, education is a top national priority requiring national leadership. To properly train tomorrow's workforce, we must give students a world-class education today. Consequently, I believe that parents and government should work together to bring revolutionary improvements to our public schools, which educate over 90 percent of our children. Parents have a responsibility to make sure their children study and learn. Government needs to meet its responsibility by fixing failing schools, establishing high standards for students and teachers, and stop wasting money on bureaucracy and put it in smaller class sizes.
My plan would demand higher standards from our schools, teachers and students, while investing in the tools they need to success. I will start by creating an Education Reform Trust Fund to increase our national investment in education by over 50 percent. The fund will support programs to help every child in our public schools reach high standards as our schools meet increased demand. I will focus on early education-making high-quality, voluntary preschool available to every 4-year-old, expanding funding for Head Start and Early Head Start, and helping families pay for child care. My plan will lower class sizes and ensure a qualified teacher in every classroom by helping to recruit and train one million talented new teachers over the next decade. I will provide tax incentives to help states build and modernize crumbling school buildings to assure our students can attend schools that are modern, safe, and well equipped for learning. I will finish wiring every classroom to the Internet and train students and teachers to use information technology to individualize learning and bridge the digital divide. My goal is to ensure all students are computer literate by the 8th grade.
But investment alone is not enough. To revolutionize education, we must also raise standards and demand strict accountability for results. My plan treats teachers like the professionals they are-holding them to high standards, requiring every new teacher to be qualified in his or her subject area, and helping find faster, fair ways to identify and improve, or when necessary remove, failing teachers. My plan demands more from students-encouraging states to develop high school completion exams, in order to ensure that every student leaves school with the skills he or she needs to succeed. And my plan demands more from schools. We cannot tolerate failing schools. My plan will require states and school districts to identify failing schools and put in place an aggressive plan to turn those schools around. To encourage public school choice, my plan would triple publicly-accountable charter schools, and require schools to issue performance report cards to help parents select the school best-suited to their child's needs and hold schools accountable.
I believe we must help students afford higher education and individuals upgrade their skills for the new economy. I have proposed new lifelong learning "401(j) Accounts" that would allow employers and individuals to put money away for qualified higher education expenses, tax-free. These accounts would let a person save for job training, education and lifelong learning, and let those savings grow tax-free. I have also proposed a College Opportunity Tax Cut, which would make up to $10,000 in tuition tax-deductible in order to make college, graduate school, and courses taken for a job more affordable.
Education is vital to ensuring that small businesses have the highly skilled workforce they need in order to compete. However, I recognize that, in today's tight labor markets, small businesses are currently suffering from a shortage of highly skilled workers. To adequately address this short-term predicament, we need to expand the administration's proposal to increase the number of H-1B visas to 200,000 per year, while enacting significant new provisions to protect and prepare the U.S. workforce and providing measures of fairness and equity for certain immigrants already in the U.S.
Today, the challenge of education is more important than ever. If we are to build on our prosperity and ensure that America's small businesses have a quality, educated workforce, we must act with precision and vigor. Only then, can we begin to help others truly realize their fullest potential.
Entrepreneur:Even though small businesses lack workers, they've been noticeably reluctant to tap two pools of potential workers: the long-term unemployed and the disabled. Is there a role for government in encouraging small businesses to hire these individuals? What policies, if any, would you propose to encourage small businesses to hire them as workers?
Gore: Today, approximately 30 million working-age adults with disabilities and approximately 75 percent of people with significant disabilities are unemployed or underemployed. I believe we must begin with an aggressive national policy to bring adults with disabilities into gainful employment. It is a smart, cost-saving method to help small businesses, and it is the right thing to do.
To begin, I have launched a new Disability-to-Work Initiative to encourage small-business public-private partnerships to hire people with disabilities, give people with disabilities the skills and technology they need to enter into the workforce, and share best practices. It will also work with nonprofit technology resource centers and businesses to make sure that youth with disabilities are ready for work. I am also working to act on the recommendations of the President's Task Force on the Employment of Adults with Disabilities, to break down barriers to fuller participation in the workplace. Just recently, I announced the creation of a new Disability Research Institute to develop innovative new return-to-work strategies.
The Clinton-Gore Administration came to office in 1993 promising to "end welfare as we know it." And we have. Welfare rolls have been cut by over half, and millions of former welfare recipients are gainfully employed. But we should also recognize that there are still welfare recipients who need help in finding long-term employment. To help integrate these people into the new economy--and to help small businesses in this tight labor market--I want to expand the welfare-to-work tax credit to encourage businesses to hire and retain people off the welfare roles. Small businesses would continue to receive a tax credit equal to 35 percent of first $10,000 in wages for the first year a welfare recipient is hired, and 50 percent of the first $10,000 in wages for the second year. I also want to take the next step in welfare reform-promoting responsible fatherhood. As we have asked mothers to move from welfare to work, all sectors of society have risen to the challenge. Now, we must help and ensure "dead-broke dads," find an opportunity to gain employment and fulfill their obligation to support their families.
Click "next section" for the rest of the interview.
Interview With Gore Part 2
Entrepreneur:Small business only stands to further benefit by participating in these new forward-looking proposals. Working together, we can continue our prosperity and make sure no one is left behind.
Gore: Small businesses appear to be reluctant to use the simple plan established by the Clinton administration to increase availability of retirement programs at smaller firms. Is this a misperception of the reception of the program? If not, what's preventing more small businesses from joining? Is there another approach that a Gore administration would take?
I believe that small businesses want to provide their employees with adequate pension programs. However, too often, the costs are too great.
As president, I will work to implement a 50-percent tax credit for 3 years of qualified contributions to employees' pensions. I also think we should continue to simplify our pension system, so that small businesses can more easily make tax-advantaged savings programs available to their employees. We can also continue reducing unnecessary paperwork and fostering an atmosphere of cooperation.
In the end, less money needs to go to accountants, lawyers, and other consultants. If we can make these minor adjustments, I am confident that small businesses can provide better employee pensions.
Entrepreneur:Tax cuts and tax reform remain popular topics with business owners. What new initiatives would you propose to reduce and simplify taxes for business owners?
Gore: I believe in a fair and progressive tax structure. That is why I have advocated a common sense strategy of targeted tax cuts that spur growth and help working families and small businesses invest in their future, without risking our fiscal discipline and threatening our economic prosperity.
As president, I plan to make the Research and Experimentation Tax Credit permanent and refundable in order to increasingly benefit small businesses. To ease the burden of the estate tax on small-business owners, I support raising the amount of estate tax relief for small businesses and family farms to $5 million for a family ($2.5 million for an individual). With this relief, more than 70 percent of small businesses, if they took full advantage of this policy, would no longer have to pay any estate tax on their small business, and estate taxes will dramatically fall for many more small businesses. And my approach would also make estate taxes fairer. For example, today, because of complicated laws, many couples only get the $1.3 million exemption for singles rather than the $2.6 million for which they are eligible. I would assure that every couple gets their full deduction. I am also committed to working to find other ways to assure that the estate tax is fair and simple for families. Finally, I propose to expand the current estate and capital gains tax deductions for landowners that transfer properties near cities, parks, or wilderness areas to conservation uses.
Entrepreneur:You've won praise for your efforts to restructure government and reduce paperwork for businesses. Yet, earlier this year, OSHA issued a guidance letter on ergonomic standards for telecommuters to a small company in texas that resulted in a firestorm of protest and caused the secretary of labor to rescind the letter. The ergonomic standards are still under review. What stance would a Gore administration take on ergonomics for telecommuters?
Gore: I believe that cooperation is far better than burdensome regulation. Measures that protect workers health and safety and the environment should not be an impediment to economic prosperity; they should be a building block to improve our overall quality of life. Over the past eight years, this new philosophy has worked well for small business.
Under the Clinton-Gore Administration, the incidence of workplace injuries has fallen to its lowest level in history. Our goal has been to make needed regulations as easy to understand and comply with as possible. For example, OSHA has posted on its Internet website new and innovative advisory software to help small businesses understand how to comply with OSHA regulations at practically no cost. The Administration has reinvented OSHA to focus on helping those businesses interested in complying to do so, and directed enforcement only toward those businesses that have demonstrated an unwillingness to comply. As President, I will encourage OSHA to continue reviewing its ergonomics safety and health rules, in order to minimize the burden on small business.
Under a Gore Administration, OSHA will continue to seek ways to improve employee health and safety with little cost or confusion to small businesses.
Interview With Bush Part 1
Entrepreneur:Governor, you've joined Vice President Gore in a call for allowing small business to join associated health plans, but the vice president has gone further in proposing tax benefits for companies joining these plans. Do you think that's a good idea? Why or why not?
George W. Bush: Tax benefits are a great way to make health insurance more affordable to entrepreneurs and employees of small business. I have proposed several affordable health-care options that allow the individual, and not the government, to find the most suitable health insurance plan. My health-care tax credit provides a 90 percent tax credit, up to $2,000 annually for the cost of a family's insurance compared to Vice President Gore's plan to provide a 25 percent tax credit for the cost of a displaced worker's insurance. As you noted, I support small business pooling to purchase health-care plans for their employees. I also favor the immediate 100 percent tax deductibility of insurance costs for the self-employed and the expansion of Medical Savings Accounts, a proven means to help the uninsured.
Entrepreneur:Small businesses are much less likely than big businesses to offer a retirement plan. One solution you've proposed is to allow individuals to use a portion of their payroll taxes to fund a retirement account. What, if any, role would small business play in contributing to their employees' use of these accounts under your plan? Are there other approaches you would pursue to increase small business participation in these retirement plans?
Bush: Under my plan to save Social Security, employers would continue to match employee contributions just as they do under the current system. However, I would allow Americans to invest a small portion of their Social Security taxes into the stock market. Current and near retirees would be guaranteed their promised benefits. If Social Security were to remain solvent under the current system (it is expected to go broke in 2037), it would offer only a 2 percent real return to new workers, compared to a 4 percent return with government guaranteed inflation indexed bonds and a seven percent average real return in stocks.
The federal tax on savings can be as high as 70 percent (40 percent income tax and 55 percent death tax). I have proposed simplifying and reducing our tax code from the current rates of 15, 28, 33, 36 and 39.6 percent to four rates of 10, 15, 25, and 31 percent, allowing Americans to save more of their earnings for retirement. My tax relief plan also eliminates the death tax, a burden on entrepreneurs and small-business workers who wish to keep their business within their families. Ninety percent of businesses that fail after the first generation cite the death tax as a factor for their demise.
As you know, research and development plays an important part in the development of new ideas. Another important part of my tax relief plan is the permanent extension of the research and development tax credit.
Entrepreneur:You've attempted to pass changes to the franchise tax in Texas that eliminate the different treatment of classes of business (i.e. sole proprietor vs. incorporated business). These proposals have been perceived as equalizing the difference between small and large businesses. Should entrepreneurs expect that a Bush administration would try to equalize the federal government's treatment of small and large business? Can you site specific areas where such discrepancies exist at the federal level?
Bush: I believe that lower taxes promote economic growth and are our best insurance policy against an economic downturn. I have proposed numerous tax cuts that will benefit individuals and small businesses, including lowering the marginal tax rates for all workers and entrepreneurs, and making the R&D tax credit permanent. I realize the important role that small businesses play in our economy and will promote policies to help them grow and prosper.
Entrepreneur:You've developed a reputation for working with legislators in Texas--and for believing that neither you nor your staff have all the answers to a particular problem. Would a Bush administration be less likely to propose solutions to problems in the future? Or would it raise issues and then develop solutions after considerable debate?
Bush: I am proud of the fact that I been able to work with members of both parties of the Texas legislature, and I will bring this spirit of bi-partisanship to Washington. I have also demonstrated leadership in a number of policy initiatives during the course of this campaign. These include my plans to save and strengthen Social Security and preserve and protect Medicare, including offering prescription drug coverage for seniors. Both of these programs were once thought of as "the third rail of American politics." I have proposed a responsible tax cut that increases the disposable income of all Americans. And of particular importance to future entrepreneurs, I strongly support education reform, where we closely measure student performance and increase accountability.
Interview With Bush Part 2
Entrepreneur:What would be your litmus test to determine whether a proposed regulation from you administration should be issued?
Bush: I strongly oppose any regulations that place an undue burden on small businesses and entrepreneurs. The government must be careful not to stifle innovation or pass unnecessary bureaucratic costs that are inevitably passed onto the consumer. My administration will carefully review all proposed regulations to determine its effectiveness or potential harm to small businesses and entrepreneurs.
Entrepreneur:One of the top concerns of small business is to increase the number of qualified workers. Your campaign has discussed education primarily in terms of improving teaching for the young. What initiatives would you propose to improve continuing education and worker retraining?
Bush: Education will be my highest priority as president. Worker retraining is an important part of that goal. I have proposed allowing individuals to place up to $5,000 a year, 10 times the current amount, into tax free education savings accounts. These accounts can be used towards any level of education, including worker retraining, college or graduate work.
Entrepreneur:Even though small businesses lack workers, they've been noticeably reluctant to tap two pools of potential workers: the long-term unemployed and the disabled. Is there a role for government in encouraging small businesses to hire these individuals? What policies, if any, would you propose to encourage small businesses to hire them as workers?
Bush: Our society, and our government, must make every effort to enable people with disabilities to lead independent and productive lives. To help Americans with disabilities freely pursue the American dream, I have proposed the New Freedom Initiative. The New Freedom Initiative encourages businesses to hire Americans with disabilities by taking three important steps. First, I will triple federal funding in assistive technology and dramatically improve access to it. Second, I will provide $20 million to help disabled Americans work from home and make the providing of a home office by a company a tax-free fringe benefit. Third, I am committed to signing an Executive Order to allow Americans with disabilities to maintain their health benefits when they return to work.
- American Express Small Business Services, www.americanexpress.com/smallbusiness
- National Association for the Self-Employed, (800) 232-NASE, www.nase.org
- National Federation of Independent Business, firstname.lastname@example.org
- National Small Business United, (800) 345-6728
- Small Business United of Texas, (512) 476-1707, email@example.com