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Washington Watch
June 25, 2003
NASE Members Say Nation’s
Tax Policies Penalize Main Street, Favor
Big Business
As tax cuts aimed at stimulating the economy take
effect, a new study by the NASE shows that optimism
among the nation’s smallest businesses has slipped
significantly from a year ago and that owners strongly
disapprove of federal tax laws they believe favor
large corporations and unfairly penalize the
self-employed. The study cites deep dissatisfaction
with current laws that require micro-businesses to pay
taxes not imposed on larger enterprises, particularly
taxes on health insurance premiums.
The “Micro-Business
and the Economy” survey shows that among the
nation’s 16 million self-employed and owners of
micro-businesses (10 or fewer employees), the level of
optimism about business conditions has fallen
significantly since 2002, while uncertainty about the
future of their enterprises has nearly doubled. Less
than a third (31.1 percent) of survey respondents say
they feel optimistic or very optimistic about
conditions for their businesses, down from nearly a
half (49 percent) in 2002. The number of owners who
say they are pessimistic or lack optimism about
conditions has increased to 24.1 percent, up from 10
percent in 2002. Uncertainty among survey respondents
about the future of their own businesses has risen to
23.5 percent from 12.5 percent.
When asked in 2002 about conditions for their business
within the next six months, more than 86 percent of
self-employed respondents agreed that conditions would
get better. In 2003, the number of owners believing
that conditions will improve in the short-term has
fallen to less than 60 percent, while those who are
not optimistic about improvement in this timeframe has
almost tripled from 13 percent to nearly 35 percent.
As the federal government passed laws for broad tax
cuts, the study shows deep disapproval from
micro-businesses of how tax breaks are distributed
between large and small companies. Eighty-one percent
of survey respondents believe that the self-employed
and micro-businesses are not treated on par with
larger corporations by the federal government when it
comes to tax breaks and other financial growth
incentives. Nearly 90 percent (89.2 percent) agree
that current tax laws unfairly penalize the
self-employed and that reforms are needed to help
businesses like theirs succeed and grow. Three
quarters (76.5 percent) feel that until broader
reforms are introduced to more directly help
micro-businesses, the economy will continue to
struggle.
According to the study, the self-employed are split in
opinions about President Bush’s economic stimulus
plan, with 58 percent favorable or cautiously
favorable toward the plan, 30 percent unfavorable and
11 (10.8) percent undecided. At the same time, there
is strong belief that the wealthy and big business are
cued up to reap the greatest benefits from the tax
cuts.
Read more about the survey at
www.nase.org.
House Passes
Two Small Business Bills
On Tuesday, the House of Representatives passed two bills
that could affect NASE Members. The first,
H.R. 923, deals
with loans issued to small businesses by state and local
governments. The bill would reduce the amount of money loan
issuers are required to keep on hand to cover defaults, thus
increasing the appeal of lending in general. The loans are
part of the
U.S. Small Business Administration’s Section 504
program, which guarantees small business loans for land,
buildings and equipment.
The second bill also deals with the SBA, but more
specifically with the SBA
Office of Advocacy.
H.R. 1772
would make the Office of Advocacy independent from the SBA,
increasing its authority on small-business issues. The NASE
supports H.R. 1772, the “Small Business Advocacy Improvement
Act,” and strengthening the Office of Advocacy.
Read more about the NASE position on these issues at
advocacy.nase.org.
Congress Debating Medicare Prescription Drug Coverage
The House and Senate are debating changes to the Medicare
program this week, including adding a prescription drug benefit.
A bill is expected before both chambers go on recess next week
for the Independence Day holiday, but may be pushed back until
they return.
The NASE is following the progress of the Medicare bill (S.
1), and encourages you to contact your representatives to
let them know your opinion. You can contact your Members of
Congress through the NASE Legislative
Action Center.
Update: AHPs and
Estate Tax
As predicted in last week’s
Washington Watch, the House of Representatives passed
legislation to create association health plans (H.R. 660) and
permanently repeal the estate tax (H.R. 8). Both bills now head
to the Senate. Read the NASE position on H.R. 660 and H.R. 8 at
the Legislative Action Center, where you can also contact your
Senator with your opinion.
Do any of these issues
affect you? Do you want to be proactive in helping the
micro-business community?
Visit the NASE Legislative Action Center and be a
Small Business Crusader. Members of Congress
appreciate hearing from their constituents. Letting
your members know how you feel on an issue puts
strength behind the NASE legislative agenda.
For more information about any of the articles in
Washington Watch, contact Maureen Petron, NASE public
affairs manager, at (202) 466-2100 or
mpetron@nase.org.
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