August 12, 1992 PRESIDENT BUSH: HELPING SMALL BUSINESSES TO GROW AND CREATE JOBS +quot;Thr

---
Master Index Current Directory Index Go to SkepticTank Go to Human Rights activist Keith Henson Go to Scientology cult

Skeptic Tank!

August 12, 1992 PRESIDENT BUSH: HELPING SMALL BUSINESSES TO GROW AND CREATE JOBS "Through their willingness to take risks and to do the hard work that is necessary to improve existing products and services, or to design, develop, and market new ones, small business people are leading America's economic productivity and innovation. Indeed, small business is the lifeblood of our Nation's free enterprise system." President Bush May 12, 1992 Summary o As a former businessman and entrepreneur, George Bush understands the difficulties faced by small business owners, especially the need to raise capital and invest in growth. President Bush appreciates small business' unique role in creating jobs. Accordingly, the President has tailored his economic policies to cut burdensome federal regulations and to help small businesses get better access to capital. o As the economy begins to recover, the President's efforts to keep inflation and interest rates low and to eliminate burdensome regulations are helping small businesses to cut costs, raise capital, and create jobs. o To spur growth, and encourage new investment, the President is pushing a far-reaching economic growth plan, including new incentives for small businesses to invest in productivity -- a capital gains tax cut and a new investment tax allowance. The President's $5,000 tax credit for first- time homebuyers' will also spur new demand for housing, generating 272,500 new jobs, 125,000 new home starts, and $12.5 billion worth of residential construction. o The President has authorized a record 6 billion dollar loan authority for the SBA for new business start ups and job expansion. o The President will not impose costly new taxes on small businesses, especially new payroll or income taxes. In contrast, Bill Clinton has already promised to impose $150 billion in new taxes on the American people, including significant new payroll tax mandates and income tax rate hikes. o Clinton's new tax increases and mandates on business would cost jobs. -- Over 800,000 small businesses would be hit by Clinton's tax hikes. Per worker health care costs would soar by at least two-thirds, while mandated family leave would cost them $1.2 billion each year. A small business owner would have to think twice about hiring each new worker. -- The National Federation of Independent Business estimates that between one and two million small business jobs would evaporate if "play or pay" health insurance becomes law. o In addition to vetoing the Democrats' $100 billion tax hike earlier this year, the President has vetoed bills that would have imposed significant new mandates on businesses, including new requirements for parental and family leave. The President has fought successfully for flexible policies -- in child care, for instance -- that serve both small business owners and employees. o The President's commitment to open new markets and conclude free-trade agreements that break down foreign barriers are creating new growth opportunities for American businesses. Small Business: Backbone of a Growing Economy o The Bush Administration's economic policies have reduced inflation and interest rates to their lowest levels in decades, laying the groundwork for a strong recovery, new growth, and more jobs. o President Bush's economic growth plan, which Democrats in Congress continue to block, would have created 500,000 additional new jobs this year. Small businesses, in particular, will benefit from the President's plan. -- Small businesses accounted for more than two-thirds of the 850,000 jobs created in 1991 and 350,000 jobs during the first five months of 1992. -- Small businesses currently employ more than half of the American work force, generate 44% of all sales, and 39% of the U.S. GNP. From 1990-91 small business profits increased by more than 32%. o Many of the President's actions have followed recommendations called for at the 1986 White House Conference on Small Business. Those recommendations included: capital gains tax reduction, liability reforms, and opposition to government mandated benefits. Reducing Taxes on Business o Capital Gains Tax Cut: President Bush has proposed a reduction in the capital gains tax to create jobs, spur new investment, and boost productivity. Congress has refused to pass the capital gains tax cut proposed in both the 1990 and 1992 Presidential economic growth packages. As a result, small businesses and venture entrepreneurs have suffered. -- 47% of most small businesses obtain start-up funds from personal capital which is taxable under current laws. o Investment Tax Allowance: The President supports a 15% investment tax allowance to encourage businesses to buy equipment, upgrade their plants, and start hiring again. -- An investment tax allowance would spur 30% of all small businesses to expand facilities and operations. o R & D Tax Credit: The President has proposed to make permanent the 20% research and experimentation tax credit, which will encourage investment in industries and technologies to lead long-term growth into the next century. o AMT Reform: The President opposes the "adjusted current earnings" depreciation adjustment under the Alternative Minimum Tax (AMT). This penalizes capital-intensive industries such as airlines, chemicals, paper, motor vehicles, and steel when they buy equipment to modernize or expand capacity. As part of his economic growth package, the President has proposed AMT Reform. o The President's proposed enterprise zones will encourage small businesses to return to inner cities and rural areas. The incentives include a limited refundable tax credit for qualified employee wages and an elimination of taxation on capital gains attributable to eligible zone property. o The President strongly supports a first-time homebuyer's tax credit as a long-term stimulant to the economy. This credit would create about 272,000 jobs, generate 125,000 housing starts, and produce $12.5 billion in additional residential construction. The Dangers of Tax-Hiking Clintonomics o Clinton's economic "strategy," which proposes the largest single tax increase in history and includes oppressive government mandates, would cost at least 2.6 million American jobs. o Clinton hides behind the veil of class warfare, claiming that his tax increases will only "soak the rich." In reality, he plans to drown small business. -- The real burden of Clinton's tax hikes will be felt largely by job-creating small businesses -- the sole proprietorships, partnerships, Subchapter S corporations and family farms that form the backbone of the small business community. -- More than 75% of those whose taxes will be raised fall into this category, and more than $40 billion of the Clinton tax hikes will be paid for directly from the profits of small business. -- Simply stated, more than 800,000 small businesses will have their taxes increased each year under a Clinton presidency. o All told, Clinton's new taxes and mandates on business will cost American businesses $101 billion next year -- fully 54% of their 1991 profits. At a time when the economy is starting to grow again, any plan that takes away over half of American business' profits -- profits that are being invested in new workers and better products -- will cost jobs, eliminate opportunity, and stifle economic growth. Health Care Reform for Small Businesses o Over the past two years, 83% of small businesses have seen their health care costs increase. President Bush realizes that small businesses have been at a competitive disadvantage in the insurance marketplace and has pledged to reform the current health care system. o The President's plan can reduce the cost of health coverage for small business without costly government mandates or higher taxes. -- Health Insurance Networks: Until now, small businesses have been at a competitive disadvantage in the insurance marketplace. The President's Comprehensive Health Reform Program encourages small businesses to form Health Insurance Networks (HINs). These HINs will allow small businesses to pool their purchasing power, enabling them to purchase low cost, high quality health insurance. The President's proposal also exempts insurance sold through HINs (as well as that sold outside of HINs) from costly state-imposed mandates and excessive state premium taxes. -- 100% Deduction: Self-employed persons would be permitted to deduct 100% of their insurance costs (as a regular business expense) from their taxable income. -- Insurance Credit Certificates: Small business employees and their families with low to moderate incomes and not receiving employer provided health insurance would receive insurance credit certificates or tax deductions of up to $1,250 for individuals, $2,500 for 2-person families, and $3,750 for larger families, making insurance affordable. o The President's plan ensures that states will develop packages of basic benefits, and will guarantee that similar businesses buying similar insurance policies pay comparable premiums, regardless of how sick their employees are. No longer will small employers find that one sick employee or one employee with a sick child will make insurance unaffordable or unavailable. o The President strongly opposes play-or-pay and Canadian- style health plans that would penalize small businesses and bring with them the rationing of services, new intrusive government bureaucracies. -- A survey conducted by the National Federation of Independent Business showed that 93 percent of small- business owners oppose government mandating that employers purchase health insurance for their employees. In fact, if these employers were forced to pay as much as $150 a month per employee for health coverage, more than one-fourth would opt to close their doors. Another one-fourth would remain open but lay off some employees. o Bill Clinton's play-or-pay health plan would require $80 billion in new taxes. -- In addition, the minimum of a 7 percent payroll tax that a play-or-pay health plan requires could result in a pay cut of $1,680 a year for the average 30-year old male high school graduate, currently earning $24,000 a year in wages, and a pay cut of $1,260 a year for the average 30 year old male high school dropout, currently earning $18,000 a year in wages. Presidential Vetoes: Stopping the Democrats' Costly New Mandates o President Bush has consistently opposed measures that would hurt small business. Among his 31 vetoes, the President vetoed three measures that would have imposed costly new mandates and regulations on small business: -- Labor Standards Amendments of 1989 Had President Bush not vetoed this bill, which increased the minimum wage to $4.55 per hour, many small firms would have had to lay off employees to meet unnecessarily inflated labor costs. The bill would have forced employers to cut services to their customers or cut jobs, particularly damaging the employment prospects of young people and less advantaged citizens. It also would have accelerated inflation, causing some businesses to close completely. -- Family and Medical Leave Act (1990) President Bush believes that family leave is an important benefit for employers to offer employees, but he objects to rigid, federally-imposed requirements. This bill would have stifled productivity and job growth which the U.S. desperately needs if it intends to compete in the global marketplace. Small businesses would have been hit hard by mandated family leave, costing them $1.2 billion each year. -- Tax Fairness and Economic Growth Acceleration Act (1992) This bill, forced through by the Democratic leadership, included a $100 billion tax increase. More than two- thirds of this tax increase would have fallen on small business owners and entrepreneurs. The plan also failed to create long-term investment and growth and would have jeopardized the economic recovery. Relieving the Credit Crunch o The Bush Administration has worked with bank regulators and has conducted extensive meetings with bankers, examiners, and borrowers all over the nation to ease the credit crunch and increase the availability of funds. o The Administration has worked with regulators to issue over 35 regulatory changes in order to increase the availability of credit. -- The Bush Administration has directed that valuation of real estate be based on ability to generate income, not on liquidation value. -- The President has taken action to end over-zealous bank examinations and to promote incentives that help banks maintain capital levels. -- The President has proposed legislation to increase the availability of credit by reducing unnecessary regulatory burdens on the banking industry. Industry observers estimate that if just 25% of the resources banks now devote to regulatory compliance could be redirected into bank capital, the banking industry could support $20-30 billion in additional lending. o The Bush Administration has called on banks with improving capital and earnings aggressively to seek out sound loans -- and not just investing their capital in government securities. Improving Access to Capital Through the SBA o Working with the programs of the U.S. Small Business Administration (SBA), the President has expanded opportunities for small businessmen and women to obtain capital. The President has authorized a record $6 billion loan authority for the SBA for new business start ups and job expansion. o The SBA has established a micro-loan program to make direct 10-year loans of up to $750,000 to non-profit intermediaries which provide small loans -- ranging from a few hundred dollars to $25,000 -- to entrepreneurs to establish or strengthen their small businesses. o The Bush Administration has worked with Congress to seek long-term improvements in the venture capital-providing Small Business Investment Corporations (SBICs). Regulatory Reform o President Bush has made the reduction of burdensome regulation a priority in his efforts to spur economic growth, and has taken significant steps to ease the strangle-hold of unnecessary regulations. Regulations, no matter how well-intentioned, often times stifle economic growth and inhibit job creation. -- In his January 28, 1992 State of the Union address, President Bush ordered a temporary halt to new federal regulations. President Bush's moratorium will help small businesses grow without sacrificing health and safety. -- According to a recent survey by National Small Business United, regulatory burdens are the second-highest concern of small business owners. -- Under the President's direction, federal agencies have taken more than 200 separate regulatory reform actions which collectively will save Americans between $11 and $24 billion annually. o The Administration has developed proposals designed to ease, or provide more flexibility in the regulation of small business. -- The Bush Administration has proposed allowing small businesses to file payroll taxes only once a month instead of as often as twice a week as now required. -- The IRS is currently working on a new federal tax form (941EZ), one specifically tailored for small business, which eliminates many questions applicable only to larger firms. In 1990, the IRS developed a new unemployment tax reporting form that is now used by approximately 700,000 small businesses, and is estimated to save 10 million hours in paperwork. -- The Administration has proposed deductible tax preparation fees, joint federal and state filing, and the electronic deposit of payroll taxes. o Under the Vice President's leadership, the President's Council on Competitiveness is assisting federal agencies in reducing the regulatory barriers that hamper the growth of American industries. -- The Council challenged overly-restrictive definitions of wetlands that would have barred development on lands not truly wet. o The President has proposed legislation that will reform the product liability system by encouraging settlements instead of costly litigation, reducing excessive court awards, and providing for prompt payment of legitimate claims. o To assist small businesses in raising essential capital, the SEC is simplifying needlessly complex registration requirements. It is also increasing the maximum size for SEC Regulation A public stock offerings from $1.5 million to $5 million under streamlined procedures. Opening Markets for American Goods o U.S. goods and services face many barriers around the world, from prohibitive licensing requirements and collusive corporate business practices to inadequate protection for intellectual property rights. President Bush is committed to redressing these barriers and increasing exports to create jobs and foster competitiveness. -- U.S. merchandise exports surged to an all time high of $422 billion in 1991, up 31% since 1988. Today, America is again the world's leading exporting nation, and small businesses have been a beneficiary of this export growth. o The President wants a strong North American Free Trade Agreement (NAFTA) with Canada and Mexico, which would create a market of 360 million consumers with an output of $6 trillion. Since Mexico began to liberalize trade in 1986, U.S. merchandise exports to Mexico have surged by more than 169 percent; a NAFTA will ensure that our exports to Mexico increase even more. -- NAFTA means more opportunities for U.S. small businesses to grow through international export. U.S. merchandise exports to Mexico and Canada have more than doubled since 1980, rising from $51 to $118 billion. o The President is working for a strong GATT agreement to open markets worldwide to a variety of U.S. businesses. A successful agreement could increase U.S. output by $1 trillion over the next ten years. -- The President stood firm in his protection of U.S. intellectual property rights and opposed arbitrary emissions targets and timetables in Rio de Janiero at the United Nations Conference on the Environment and Development. o Had the President not successfully objected to these Rio initiatives, the U.S. biotech industry would have been decimated, the U.S. opposed provisions that would have jeopardized U.S. biotech industry activities overseas, and new job-costing carbon taxes. Development of a Skilled and Literate Workforce o President Bush believes that improving the American educational system and job training programs are critical to America's competitive position in the world. The President has begun programs that will lead to a better educated workforce that can quickly adapt to the changing business needs of the future. -- The President's America 2000 grass-roots education strategy advocates school choice (both private and public), tougher standards, and would create break-the- mold New American Schools. o The President has doubled funding for literacy and established the National Institute for Literacy which coordinates all federal literacy programs. Literacy is a top priority of both the President and Mrs. Bush. o The President's Job Training 2000 initiatives will replace several different Federal job-training programs with a new, coordinated, market-driven system. Services now provided under the Job Training Partnership Act will be provided through Skills Centers that will provide "one stop shopping" for those in need of job training. -- On April 14, 1992, President Bush sent to Congress his Youth Apprenticeship Act. This bill facilitates the development of voluntary youth apprenticeships that integrate high academic standards, workplace skills, and real working experience leading to meaningful employment. o The President's Lifelong Learning Act ensures that higher education will be available to many people who are now denied access, particularly part-time students. This Act makes it easier for employees of small businesses to get training by providing a lifetime line of credit for all Americans. Supporting Women Entrepreneurs o Through the Office of Women's Business Ownership at the Department of Labor and the Small Business Administration, the Bush Administration assists nearly 5 million women entrepreneurs in the U.S. Census Bureau statistics indicate that women own 32% of all small businesses in the United States, projected to grow to 40% by the year 2000. o President Bush has established initiatives designed to help women to establish and maintain their own businesses. His initiatives provide technical assistance, improve access to credit, and foster export growth. White House Conference on Small Business o The President, in recognition of the important role small business plays in the American economy, fully supports the 1994 Conference on Small Business.

---

E-Mail Fredric L. Rice / The Skeptic Tank