To Become Relevant, What GOP Majority Must Do For SMEs



Sept. 16, 2017-


The U.S. economy is blossoming, despite the inept Congress.

Why?

To use another gardening metaphor, small and medium-sized enterprises (SMEs) haven’t received their deserved nourishing fertilizer from public policy.

With a few exceptions, members of Congress resemble Abbott and Costello in their famous “Who’s on First” routine.

Ironically, the Small Business Administration reports 99 percent of all employers are small businesses.

They employ almost 50 percent of private-sector employees, and create 75 percent of new jobs.

But these are not wealthy people. Instead of benefiting by paying corporate tax rates, 90 percent or more file tax returns as individuals.

So despite what Democrats claim, they’re not in the same category as the top 1 percent of income earners.

Data – published by a government agency and a leading small-business association – U.S. Treasury and the National Federation of Independent Business, respectively – indicates that just 2.4 percent of small businesses earn revenue higher than $250,000.

Seventy-one percent have an adjusted income under $100,000 annually.

Unfortunately, such small business owners have to pay the individual tax rate, the self-employment tax and the net investment tax. That’s why Tax Foundation data indicates that the most-successful small businesses are saddled with a marginal federal tax rate of 44.6 percent.

And don’t forget, none of this includes state-income tax rates. So by paying close to cumulative 50-percent tax rates little wonder such business owners have grievances.

Economic trends

True, consumer confidence is up.

Investors love proposed Trump Administration policies. The stock market has skyrocketed.

This also means average Americans are enjoying massive growth in their 401(k) retirement accounts.

Unemployment is low and jobs are coming back from overseas.

Concurrently, this year’s Q2 gross domestic product (GDP) is 3 percent. That’s 300 percent higher than in recent years and the eight-year average under President Obama.

Forecasts of leading economic indicators provide more hope.

So it’s no coincidence that a majority of Americans is pleased, according to a legendary polling company.

Gallup poll

Despite what the mainstream media would lead us to believe, a Gallup Poll reported that 51 percent of respondents approve of President Trump’s handling of the economy.

This is particularly noteworthy because it’s been rare for presidents over the last four decades to receive such high economic-approval ratings during their first year in office.

That’s right. With one exception, no other Republican or Democrat has been as successful.

President Trump’s economic approval rating is higher than his predecessors such as President Obama, Bill Clinton and Ronald Reagan.

The exception: In his first year in office, 2001, George Bush had a 72 percent rating.

Out-of-sync Congress

But here’s the conundrum:

In comparison to the Trump Administration’s economic leadership – despite a majority, no doubt about it – Republicans in Congress look inept on the economy. Indeed, no one in Congress has significant economic-approval ratings.

There are two ramifications:

Firstly, to guarantee the Trump Administration hits its 4 percent GDP objective, Republican lawmakers have to get their act together for the majority of employers – small and medium-sized businesses.

If they don’t, this means the economy won’t be firing on all cylinders for growth and job creation.

Secondly, Republicans continue to look and behave like Abbott and Costello in their “Who’s on First”, which was only an act.

But what’s happening in Congress is nightmarish reality and they Republicans will lose their governing majority in Congress. Why?

They’re not governing. Americans, especially, SMEs overwhelmingly voted for positive change. They’re still getting the same dysfunction from Congress.

Obstacles/solutions

Business owners know they deserve a serious tax cut so they can grow, invest in equipment and develop products – these measures will create jobs.

In turn, this will accelerate a middle-class revival.

In addition, with no incentives passed by Congress and no ObamaCare reform, healthcare remains one of the typical business owner’s biggest expenses.

But insurance companies have abandoned health-care exchanges in virtually every state leaving countless Americans without choices or even coverage.

Self-employed business owners who are forced to buy individual policies are sick and tired of double-digit ObamaCare increases in premiums and deductibles.

Others who have small workforces have been forced to cut their employees’ hours under the onerous ObamaCare mandates. That’s a salient reason why the average American workweek is only 34 hours.

But Republicans failed on ObamaCare reform because they didn’t have a unified strategy for success in opposing the Democrats’ government-dependency philosophy.

Time is running out if Republicans hope to avert misfortune in the 2018 mid-term elections.

What is needed is a unified economic-growth mindset and strategy.

The next step should be an immediate easy-to-understand tax-cut bill for the nation’s 99-percent of employers.

From the Coach’s Corner, relevant editor’s picks:

7 Capitalism Principles for Economic Growth, Prosperity — Employers are discouraged from hiring largely because of uncertainty created by public policies. That includes uncertainty – created by ObamaCare – in costs and taxes.

On 9/11, America’s Economic Preparedness Worse than Ever — Unfortunately, today is the 16th anniversary of that tragic day, and hurricanes have devastated America. But America’s fiscal ability to deal with such crises is worse than ever. Here’s what Congress must do.

Solution to Cure Worker Skills Gaps, Underemployment — An innovative solution has been unveiled to solve a big economic conundrum. The solution is designed to create 25 million new jobs and help grow the economy by 4 percent.

Why President Trump’s Growth Budget, Reforms Matter — Deficit-spending and the resulting massive debt severely damages America’s economic prospects and hurts each American. But a disciplined approach will make America great again — by shrinking the national debt and implementing other needed reforms.

Analysis: Trump’s Vision to Fix Trade Deficit, Create Jobs — Donald Trump acts positively: Americans are tired of the reign of politically correct terror, the movement for income redistribution, and the massive loss of good-paying jobs.

“Those who are too smart to engage in politics are punished by being governed by those who are dumber.”

Plato


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.




Job Creation: Obama Refused to Listen to Intel’s CEO


Before he retired, Intel CEO Paul Otellini lamented it costs $1 billion more to build a semiconductor factory in America than it does abroad, and he’s calling for regulatory cutbacks and tax cuts – the two quickest ways to stimulate job growth.

Those are the messages he gave in a widely publicized speech to the Council on Foreign Relations in New York on Oct. 5, 2010.

ID-10065921 David Castillo DominiciHis salvo blames government for the lack of jobs in America.

But President Obama ignored his request.

“…contrary to public opinion, this is not because of labor cost differences,” says Mr. Otellini. “Ninety percent of the cost difference is the result of tax and incentive policies.”

Again, the Obama Administration and the president’s public-policy crowd refused to listen.

Worse, Mr. Obama slapped major employers in the face. (See: The Link: Artificial 5,9% Jobless Rate, Obama’s Firing of His Jobs Council)

Mr. Otellini’s assertion is verified by an alarming trend — why startups no longer lead in job creation.

To boost domestic production and technology, he asked for government policy reforms:

— Tax credits or a 5-10 year tax holiday to companies, domestic or foreign, that want to set up or expand a factory in the U.S.

— Adjusting our tax rate to a level approximately equal to our global competitors for investment.

— Removing regulations that needlessly deter investment…Given the urgency of our situation, we should create a fast track permitting process for companies that want to build new factories here.

Obviously, he’s convinced new tax policies will work.

“This will bring more manufacturing jobs back to the U.S.,” he says. “It will employ our workers and stimulate the economy, all at no cost to us.”

Mr. Otellini says his proposal to reduce the tax rate would “reverse the flow of capital and jobs out of this country.”

Frequent readers of this Web site know that the Intel CEO has Biz Coach support for his public-policy ideas.  Countless articles have been published here.

From the Coach’s Corner, here is the text of Mr. Otellini’s speech.

 “I’m here to tell you, some time in the next couple of months, we’re going to be creating between 250,000 jobs a month and 500,000 jobs a month.”

Joe Biden, at a Pennsylvania fundraiser, April 23, 2010

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry. 

Photo courtesy of David Castillo Dominici at www.freedigitalphotos.net

Seattle business consultant Terry Corbell provides high-performance management services and strategies.