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Simplify and lower
taxes
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Release Date:
01/20/99
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Taxes that are too
high and a system that is ridiculously complex
stand in the way of small business
growth.
1. Sunset the current tax
code.
The Problems for Small Business: Small
business owners are overwhelmed by a tax code
that is complex, confusing and biased against
them. Taxes are too high, and the code itself is
so complicated and cumbersome, it is beyond
repair. The Legislative Solution: The time for
tinkering with the current code is over. The
time to set a sunset date and develop a new code
-- a fairer, simpler code that rewards work and
encourages savings -- is here.
2. Repeal
the death tax.
The Problems for Small
Business: The death tax, or "estate tax," does
not only affect the wealthiest Americans. The
death tax creates a disincentive to expand a
business, create jobs, and often, literally
taxes the family businesses right out of the
family. Nearly 60 percent of business owners say
they would add more jobs over the coming years
if death taxes were eliminated. The Legislative
Solution: Repeal the death tax.
3. Save
Social Security by creating personal retirement
accounts (PRAs).
The Problems for Small
Business: Small business owners, like all
Americans, are concerned about the future of
Social Security. Their perspective on the issue
is unique, because they view the issue from the
standpoint of a future retiree and from the
standpoint of an employer paying payroll taxes.
The Legislative Solution: NFIB advocates four
principles to ensure Social Security reform is
fair to small business:
Payroll taxes
must not be increased. Social Security reform
should be seen as an opportunity to reduce,
rather than increase, paperwork burdens. Social
Security should continue its commitment to
provide benefits to retired workers.
Individually controlled personal retirement
accounts (PRAs) should be part of Social
Security reform.
4. Cut payroll taxes
and return the unemployment system to the
states. The Problems for Small Business: While
unemployment insurance is essentially a state
level program, small businesses are hit with a
double whammy because unemployment taxes are
collected at both the state and federal levels.
The federal tax pays for the program's
administration, and the state tax pays for the
actual benefits. This is an inefficient system
that rests its tax burden on employers and helps
make payroll taxes the highest of all the taxes
that small business pays. The Legislative
Solution: Get the Washington bureaucracy out of
the way, return the unemployment insurance
system to the states and streamline the process.
This will open the door for states to both cut
payroll taxes and administrative costs of the
program.
Make health care more
accessible
The cost of health
insurance has been the No. 1 concern of NFIB
members for more than a decade.
5. Oppose
health care mandates.
The Problems for Small
Business: Mandating benefits increases the cost
of health insurance, and these higher premiums
can force small employers to drop coverage.
Mandates not only take away the freedom of
employers and employees to choose the benefit
package that best meets their needs, they lead
to an increase in the number of uninsured
Americans ... that is not real health care
reform. The Legislative Solution: Stop mandating
health care benefits at the federal
level.
6. Allow small businesses to band
together to purchase health insurance.
The
Problems for Small Business: Due to economies of
scale and the dynamics of insurance risk pools,
health insurance is much higher, per employee,
for small business than it is for large
companies. This bias is exacerbated by the fact
that small businesses that offer health benefits
must comply with costly state and federal
mandates, while the large companies that
self-insure are exempt from those mandates. The
Legislative Solution: NFIB wants to level the
playing field in the purchase of health
insurance benefits by allowing small businesses
to band together, across state lines, to create
purchasing groups. This will allow small firms
to enjoy the benefits of economies of scale and
give them the same opportunity enjoyed by
self-insuring big businesses that are exempt
from costly state and federal
mandates.
7. Help individuals who buy
their own health insurance.
The Problems for
Small Business: The tax treatment of health
insurance is at the root of our employer-based
system. Employers are permitted to deduct the
cost of health care premiums for their employees
while individuals who purchase their own health
care cannot. The Legislative Solution: Change
the tax law to allow all individuals who
purchase their own health insurance to deduct
100 percent of the cost.
Ease the
burden of excessive regulations
The
regulatory system must recognize that small
business is not the same as big business. NFIB's
Small Business Growth Agenda seeks to set small
business apart from the regulatory maze, freeing
up entrepreneurs so they can do what they do
best: create jobs.
8. Reform outdated
workplace safety rules.
The Problems for
Small Business: Many of today's workplace safety
rules were established during an era when large
companies dominated the workforce. Today's
working environment is vastly different.
Eighty-five percent of businesses in America
have six or fewer employees, and of those six,
2.4 are members of the business owner's family.
Of course, today's employers want a safe
environment: they want to protect their
families. Furthermore, one-size-fits-all
regulations, which treat small business like big
business, are disproportionately cumbersome and
expensive for smaller firms. The Legislative
Solution: Review and repeal outdated workplace
safety rules.
9. Make regulations less
costly to small business.
The Problems for
Small Business: The per employee regulatory cost
to small firms is approximately 50 percent more
than the cost to large firms. It is unfair and
illogical that small businesses employ 53
percent of the work force, but shoulder 63
percent of the total business regulatory costs.
The Legislative Solution: Federal agencies
should be required to comply with current laws
designed to cut red tape for small
business.
10. Oppose minimum wage
increase.
The Problems for Small Business:
Once again lawmakers are pushing for an increase
in the minimum wage from the current $5.15 an
hour. A recent proposal would increase the
minimum wage by $.50 an hour for three years,
bringing it to $6.65 an hour, then indexing it
to inflation forever. The Legislative Solution:
Defeat any increase or indexing of the minimum
wage.
11. Oppose expansion of Family and
Medical Leave Act (FMLA).
The Problems for
Small Business: Lawmakers are proposing
legislation to expand the current FMLA by
requiring employers to give employees up to 24
hours a year of unpaid leave for their
children's school activities and routine medical
appointments. Attempts are also under way to
eliminate or lower the current 50-employee small
business exemption from the FMLA. The
Legislative Solution: Expansion of family leave
must be defeated because government mandates
dictate benefits taking away small employers'
and employees' freedom to negotiate benefit
packages.
12. Oppose unfunded mandates
on the private sector.
The Problems for Small
Business: Government mandates have very real
costs and, all too often, small business owners
are feeling the squeeze. While the Unfunded
Mandates Reform Act, signed into law in 1995,
protects the public sector from the costs of
mandates, the private sector has yet to enjoy
the same protection. The Legislative Solution:
The Mandate Information Act should be passed and
enacted. This bill will be one of the first
items of business for the 106th Congress. It
addresses the problem of unfunded mandates on
the private sector by directing the
Congressional Budget Office to arm Congress with
the financial information needed to carefully
weigh the impact of proposed legislation on
small businesses and their
employees.
Curb frivolous
lawsuits
Frivolous lawsuits and
out-of-control, lottery-sized damage awards
characterize our system today -- a very
expensive system that too often drives small
businesses out of business.
13. Limit
financial damages for lawsuits.
The Problems
for Small Business: Small business owners face
rising costs for liability insurance and the
crippling cost of defending themselves should
they be named in a suit. Innocent or not,
defending oneself is costly; the estimated cost
for a business owner's defense in the average
lawsuit is $100,000. Considering that the salary
of a typical small business owner is only
$40,000-$50,000, it's easy to see that just one
frivolous suit can put a small firm out of
business. The Legislative Solution: Non-economic
damages (punitive damages and pain and
suffering) in civil suits ought to be capped at
fair, reasonable levels.
14. Get small
businesses out of the Superfund quagmire.
The
Problems for Small Business: Superfund, the 1980
law that was intended to pay for the cleanup of
the nation's hazardous waste sites, has turned
into a bonanza for lawyers and a nightmare for
small business. Since the liability structure of
Superfund encourages excessive litigation, small
business owners can be dragged into expensive
legal battles when they have only contributed
household garbage or a minute fraction of the
site's waste. The Legislative Solution: Change
Superfund to remove most small businesses from
unfair litigation and provide those small
businesses that remain in Superfund disputes
with an equitable settlement
process.
CONTACT: Angela
Jones at
202.554.9000
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