We’re months away from the 2016 presidential election, but election season has been in full swing for some time now. On the heels of Super Tuesday, which helped provide a clearer picture of who truly has a shot at the White House, candidates on both the Democratic and Republican side will continue to stump for enough support to gain their party’s nomination—or momentum for a future run.
Every election cycle provides a wealth of promises, calls to action, and policy proposals. One common target audience of these pitches are small business owners, which makes sense: There are over 28 million small businesses in this country, and the strength of the small business scene is a good indicator of overall economic health. To win over small business owners is to have support in shaping U.S. economic policy.
There are some radical differences between the candidates when it comes to how they propose supporting SMBs. There are also some subtle (but important!) differences, particularly among candidates of the same party. Let’s review what each candidate says about small businesses, small business owners, and the role the government should play in supporting them.
Clinton submits herself to the electorate as “the small business president.” She makes a point of bringing up small businesses as the engine of the economy during debates, and she’s committed a substantial portion of her campaign to touting her passion and her plans for helping small businesses grow and thrive. She even lists “small business” as a campaign issue on her site, unlike her opponents.
On her website, Clinton lists 5 key points in her plan to support small businesses as president:
- Greater access to financing (particularly for minority- and women-owned businesses) through easing regulatory burdens and supporting new financing models.
- Cutting the red tape that surrounds small businesses at every level of government.
- Providing tax relief for small businesses that pay higher rates than large corporations.
- Tapping new markets through improved infrastructure and support for innovative platforms that allow people to sell to customers around the globe.
- Providing support for owners and entrepreneurs—particularly young people—through incubators, mentors and training.
Generally, Clinton has voiced support for many of President Barack Obama’s economic policies, which includes the continuation and improvement of the Affordable Care Act. Most small business owners are the heads of companies with less than 50 employees, and as such are exempt from the significant financial requirements of the law—but it remains to be seen how all the costs of the Act would be covered under an expansion. This is a key issue for small business owners to watch in the lead up to November.
The Republican frontrunner has made his name creating a real estate empire with mixed-use skyscrapers, casinos, hotels, and golf courses, as well as a host of other entrepreneurial endeavors such as restaurants, games, beauty pageants, and forays into entertainment media. Almost none of his businesses could be qualified as “small,” though he does claim have the interests of small business owners in mind.
The thrust of Trump’s appeal to small business owners—beyond the mere fact that he’s not an establishment politician—is his stance on taxes: His position on the corporate income tax rate is to slash it from a high of 35% to a maximum of 15%. From a policy paper he wrote on the subject:
“No business of any size, from a Fortune 500 to a mom-and-pop shop to a freelancer living job to job, will pay more than 15% of their business income in taxes… making America’s tax rate one of the best in the world.”
Though the main goal of this tax cut would be to aid big businesses and reduce corporate inversions, Trump notes that it would be a boon for “freelancers, sole proprietors, unincorporated small businesses, and pass-through entities” that are taxed at high personal income tax rates. He also says the loopholes and credits exploited by big businesses become financial burdens to small businesses, stifling them.
Interestingly, Trump’s stance on immigrants—namely, that he would deport 11 million of them and prevent more from coming—might have an effect on small businesses as well: an estimated 40% of Fortune 500 companies were started by immigrants or their children.
The self-described democratic socialist has made a name for himself in this race by railing against Wall Street, big banks, and bigger corporations, so it’s no surprise that he has lots to say about the state and future of small business.
Sanders has 4 main points of emphasis in his plan to support small businesses:
- Provide low-interest loans—at rates similar to what the Federal Reserve offers to foreign banks—so companies can improve their business while maintaining good cash flow.
- Increase access to education and training for entrepreneurs.
- Defend net neutrality to keep access to the internet open to all.
- Enact visa reform to ensure workers from outside the U.S. aren’t exploited or that visas aren’t granted to those taking American jobs.
From a legislative standpoint, Sanders has fought with Clinton over her husband’s decision to repeal the Glass-Steagall Act in 1999, which Sanders says encouraged local banks to invest in risky Wall Street trading rather than providing loans to small businesses… In turn becoming one of the key drivers of the 2008 financial crisis. He also supported the Small Business Jobs Act, which created a $30 billion lending fund to encourage smaller banks to loan to small businesses.
One contentious proposal that Sanders champions is raising the minimum wage to $15 an hour—some small business owners believe they could not afford to do business if forced to pay those wages to all workers.
The U.S. Senator from Florida recently said that small business is not a “special interest” but “the backbone of the entire economy.” His vision for how to strengthen that backbone is similar to that of his fellow Republicans: he believes the greatest impediment to small business growth is big government.
“Big government is not good for the people trying to make it,” Rubio recently said in a tele-town hall meeting, contrasting new businesses with those that have already been established and have the resources—namely, compliance officers and lobbyists—to deal with overregulation.
Rubio’s website lays out his basic strategies for standing up for small business owners. Like Trump, he’d like to enact tax reform that cuts small businesses taxes—his cap is 25%—and allows them to immediately expense new investments. He plans to repeal the Affordable Care Act, which he says burdens workers and employers with $1 trillion in taxes. He’ll look to establish a National Regulatory Budget and generally reduce the effect of regulations on the economy. He wants to pursue avenues of American-made energy, including approve construction of the Keystone Pipeline. Finally, he wants to establish a “common sense balance” between worker and employer rights, which includes removing union obstruction of worker pay increases.
Cruz called tax and regulatory reform “the two most important levers Washington has to help small businesses grow and prosper.” He favors a 16% flat tax on net receipts for all businesses, though they could deduct all payments to other businesses like the purchase of fixed assets. He also wants to eliminate payroll taxes, as well as the Internal Revenue Service as a whole.
Like Rubio, Cruz wants to massively reduce the amount of federal government regulation that he believes hurts small business. He cites the Environmental Protection Agency’s rules on carbon emissions as a prime example of this regulatory overreach, which he promises to cut down on if elected.
Cruz has made fighting the Affordable Care Act his calling card and told a tele-town hall meeting that he’s heard from small business owners that they’ve resisted growing in order to avoid passing the 50-employee threshold of the ACA mandate. His goal will be to create a system that will “delink health insurance from employment.” He’s also signaled adamant opposition to raising the minimum wage, saying it could cause businesses to pull back on hiring or reduce their workforce.
The governor of Ohio echoes many of the sentiments of his fellow GOP contenders, but he does so with a typical Midwestern politeness. He believes that there needs to be a one-year moratorium on all major new regulations to give businesses breathing room, but that going forward, state and federal officials need to “have a good relationship and partnership“ with business. He also cited respect and attitude as major components of success.
Kasich often champions his work in Ohio and says what worked in the Buckeye state can work on the national level. Last year, Kasich unveiled a plan to eliminate income tax for business owners, a $696 million tax cut that affects over 1 million businesses. The plan has come under some scrutiny, however: 90% of those businesses would save only a few hundred dollars per year, according to state statistics.
However, Kasich remains adamant about his support for small businesses and job creation. He voted to provide $46 billion in tax cuts over five years, and in his time as governor Ohio went from a loss of 350,000 jobs to a gain of 347,000.
On his website, Kasich touts the success of JobsOhio, a non-profit organization that focuses on attracting and retaining jobs in strategic industry sectors within the state, as well as his Common Sense Initiative’s review of more than 5,500 state regulations in order to identify ways to reduce hardships on small businesses.
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from Fundera Ledger https://www.fundera.com/blog/2016/03/14/2016-presidential-candidates/