Small firms take sides in US election
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Two of small businesses' three greatest concerns are taxation and what they believe to be government over-regulation. Sounds familiar? The third gripe immediately highlights a key difference between US and European small and medium-sized enterprises. Its name is healthcare costs. As Americans go to the polls to vote for a new president and Congress today (7 November), SMEs (or SMBs as they tend to call them) are 67%-to-21% erring towards Republican candidate George W. Bush, according to an opinion poll commissioned by entrepreneurship website inc.com. Just why can be explained by their issues hitlist. Number one is taxation at 45%, number two is regulation well below at 25% and healthcare costs bring up the rear at 15%. Hardly surprising that the Texan governor wins the SMB vote, since he is proposing a
({@denom})1.6-trillion (1.9-trillion-euro) tax cut. In an op-ed article 'Why you should vote for Bush', onvia.com columnist Philip Harper wrote: On the issues of importance to the small-business community the Republicans win in a landslide. Their positions on taxation, regulation, and tort reform are nearly congruent with those laid out by the National Federation of Independent Business in its Small Business Growth Agenda. Not so the Democrats . Bush's plan includes repeal of inheritance tax and top-tier income tax rates to 33%; a key point since nine out of ten US small businesses pay personal income tax rather than corporate rates. Moreover, the Republican candidate has promised action to carry out tort reform, so cutting down on the frivolous law suits that contribute to the US' incredible
({@denom})163-billion (190-billion-euro) annual bill for damages and lawyers' fees in tort lawsuits. For his part, Vice-President Al Gore is targeting tax measures and offering business-friendly tax credits for 'life-long learning', saving and research and development. Unlike Bush, he would keep the inheritance tax and only exempt 70% of SMB heirs from paying tax upon the owner's death, while tort reform comes well down his agenda. Small business is a significant lobby in the States. The country, particularly since the current nine-year superboom got underway in 1991, has often been held up as the world's template for the growth-generating effects of innovative SMEs. After all, Cisco Systems, the world's biggest provider of network equipment with market capitalisation of
({@denom})380 billion (440 billion euro), was an SME 15 years ago. The country simply has a longer and stronger tradition of entrepreneurship than anything existing in Europe. A recent study by the Kaufman Center for Entrepreneurial Leadership found that 70% of respondents aged between 14 and 19 already want to become - not train drivers, soldiers, doctors or lawyers - but business owners. Apart from the culture, the federal government also stokes these entrepreneurial fires with its specialist agency, the Small Business Administration. Since 1993, the SBA claims to have helped 375,000 small businesses get their hands on
({@denom})80 billion in loans - more than in the previous 39 years combined. Under the Clinton administration, the SBA has been mandated to target loans to women and minorities, coming in over the same period at
({@denom})12 billion (14 billion euro) and
({@denom})18 billion (21 billion euro) respectively. During the past fiscal year, Aida Alvarez, the SBA chief, reported that American small businesses had received a record of
({@denom})18 billion (21 billion euro) in agency-backed financing. If Bush takes over the White House in January, Alvarez will be looking for a new job. Small businesses, for all their pro-low-tax, pro-market polling returns, will be more than a little put out if Bush and Co. decide to scale back the SBA's soft-loan financing.
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