With an estimated 10% of the popular vote, Gary Johnson is predicted to get more votes than any third-party candidate in 20 years. You may have even seen the #LetGaryDebate movement on Twitter. This could be a monumental year for the Libertarian Party.
Small business owners and entrepreneurs should be paying attention to what Gary Johnson and others in his party think about small business. Because next time around, they may poll even better.
“Entrepreneurs, businesses, and economic prosperity are the building blocks for job growth”
As Governor of New Mexico, Gary Johnson was praised for having the highest job growth of all 50 governors. But during his 2012 campaign, he said, “I didn’t create a single job.”
That’s because entrepreneurs, businesses, and a supportive economic environment did.
Johnson’s small business policy is simple: implement a regulatory and tax environment that makes it fair and easy to start businesses and create jobs. Government regulation should be used to protect the American people from bad or unfair business behavior. But it shouldn’t get in the way.
Johnson has said that government overregulation is holding back small businesses. He isn’t wrong. According to research by the National Federation of Independent Business, for every 10% increase in regulation expenses, the number of businesses with less than 20 workers falls 5% to 6%.
Johnson points out that only large corporations benefit from such over-regulation because they have the resources to navigate through it. Big corporations simply pay those expenses, while small businesses that could have been worthy competition are priced out of the game.
Johnson wants to give small businesses more growth capital. He doesn’t want the small guys to be run into the ground by regulation and tax expenses. Small business owners around the country would benefit. Those working in heavily regulated fields, such as manufacturing, energy, and international trade, stand to gain the most.
On the other hand, if too much regulation is stripped away, that may lead to new problems. Opponents to Johnson’s ideas point to the 2008 Subprime Mortgage Crisis—a disaster caused by the unscrupulous behavior of greedy lenders who took advantage of bare-minimum real estate regulations.
“Committed to meaningful criminal justice reform”
You may be thinking, “What’s criminal justice reform got to do with small business?” Unless you own a law firm, it may be hard to see the connection. Yet criminal justice reform could be an unexpected way to stimulate the American economy.
On his page for criminal justice reform, Johnson emphatically states:
“How is it that the United States, the land of the free, has one of the highest incarceration rates in the world? The answer is simple: Over time, the politicians have ‘criminalized’ far too many aspects of people’s personal lives.”
Johnson’s words are backed up by research:
- The U.S. has a total of 2.3 million people in its jails and prisons—which gives it the highest incarceration rate in the world.
- The poor are arrested and incarcerated at a much higher rate than other economic classes, which helps fuel a cycle of poverty and limits social mobility.
- Blacks and Hispanics are incarcerated at a much higher rate than whites in America, which has a tremendous negative impact on their communities.
For Johnson, true criminal justice reform means significantly less people in jails and prisons. And more people—especially minorities and the poor—free to pursue the American dream.
If such reform was put into action and led to positive results, the economy would see more people working, creating businesses, and spending money. Which, as a small business owner, is wonderful news.
It’s important to note that the people Johnson wants to release are nonviolent drug users and other nonviolent criminals. Specifically, Johnson wants to end the War on Drugs and unnecessary criminal laws. Also, he believes common sense has to replace tough mandatory sentences.
Johnson and others in the Libertarian Party see prison system reform as paramount not only to the economy, but also to human rights in America.
“No excuses. No games. A real balanced budget.”
Gary Johnson notes that the national debt is set to reach $20 trillion by 2017. To him, that’s just obscene. It’s a threat to the future of the American economy.
He blames both the Democrats and the Republicans for letting the debt spiral out of control. To Johnson, a vote for either mainstream party is a vote for continued debt. This could greatly limit U.S. economic growth for the foreseeable future.
Here’s what he plans to do:
- Scrutinize every line in the budget—and reduce wherever possible (some sources say his ultimate goal is a 43% cut in federal spending).
- Cut military spending—the U.S. government’s biggest expenditure—by a significant amount.
- Reform entitlements so that they are more cost-effective and privatize where possible (for example, Johnson wants to privatize Social Security).
Getting America back on the road to a balanced budget would almost certainly stimulate the economy. A reduced national debt could mean better GDP growth because policymakers would have a lower interest burden and could use revenues more productively. Additionally, the U.S. government would be in a better position to handle financial crises.
A balanced budget could also mean a reduction in your business taxes, as the federal government would require less income to operate. Many studies have found that high tax rates limit investment, so lower taxes could lead to additional reinvestment in your business and more reliable cash flow.
On the other hand, if you run a small business that bids on government contracts, you may have to look elsewhere for growth. For instance, if you do work for the Department of Defense, you could get fewer contracts.
Also, reducing spending wherever possible may not work out so perfectly. The Center on Budget and Public Priorities states that a stable debt-to-GDP ratio is required for economic sustainability—not a balanced budget. What exactly that ratio should be remains to be seen.
Lowering the current deficit is certainly necessary, and Johnson intends to do just that. But limiting spending in areas that boost future productivity, such as education, could be harmful to the economy in the long run.
Johnson has stated he will only cut out the unnecessary, so this may not be an issue. Yet what is necessary and what is unnecessary is quite subjective. His policies on government spending could greatly benefit the economy—as long as the focus of the reductions is to eliminate waste spending (and not just the amount of dollars spent).
“Today’s federal tax code penalizes productivity, savings and investment”
When it comes down to it, Gary Johnson wants to simplify the tax code tremendously. Specifically, he wants to eliminate special interest loopholes and repeal income and payroll taxes and all other federal taxes.
Yes, you read that correctly.
With Gary Johnson in the White House, you would not have to pay income tax or business tax. As a small business owner, taxes probably make you want to scream at times. Not having to pay them at all would leave you with a much larger bottom line.
But how will the government make up for this significant loss of cash flow? Johnson believes it won’t be too difficult. Just enact a national sales tax. This consumption tax would be between 23 and 39 percent (the exact percent is not clear). Additionally, those in lower income brackets would receive tax refunds for the purchase of necessities.
If such a policy worked, small business owners could win bigtime. Not only would profits be up, the U.S. would also be a more attractive place for investment. Expanding your business and achieving your dreams would be significantly less stressful on your wallet.
Yet critics of Johnson’s tax code point to the fact that the middle class will suffer the most (since the lower class gets a rebate and the rich are relieved of their higher income tax rate). Secondly, a high consumption tax could actually decrease consumption, which would end up hurting small businesses. Lastly, in an effort to avoid that sales tax, there may be more underground transactions for everyday items (or people would just go abroad to make bulk purchases).
Again, whether such a revolutionary policy would work is up for debate. Even if Johnson does become president, he would probably face opposition from both sides of the aisle on his tax policy.
For Johnson, it’s all about civil liberties and economic freedom
Libertarian ideas on civil liberties are simple yet profound: protect privacy, promote freedom, and trust liberty. Gary Johnson stands by these ideals.
For example, the presidential candidate firmly believes in Internet freedom. He says government intrusion not only directly violates Fourth Amendment rights, but also prevents America from taking full advantage of the Internet—a tool that stimulates progress and innovation.
In general, Gary Johnson wants the government out of your life, cell phone, bedroom, financial transactions, and anywhere else they snoop. He believes it’s time to allow Americans to do what they do best: freely live life in the pursuit of happiness and prosperity.
There are some folks that claim Libertarian ideas would result in lawlessness and threaten national security, but the Libertarian candidate is not advocating for anarchy. He simply wants common sense policies that uphold the Constitution.
Research backs up Johnson’s ideas. Countries that are economically free have citizens that live happier and financially richer lives.
The U.S.—long a symbol of freedom to the world—is falling behind in terms of economic freedom. In a 2016 annual report titled Economic Freedom of the World, the United States ranked 16th.
Putting a stop to unnecessary government intrusions, enacting prison reform, limiting regulation, and simplifying taxation are what Johnson wants to do most. These changes would help create a freer business environment, one in which small businesses and the overall economy can prosper.
It’s your vote
You’ve already learned about Hillary Clinton and Donald Trump. Now you know all about what Gary Johnson wants for America’s small businesses.
As a small business owner, it’s important to know what each candidate offers you. If you believe Johnson’s ideas would be great for entrepreneurs, go for it. If not, choose someone else. Just make sure you know where every candidate stands before you decide.
The post You Need to Hear What Gary Johnson Has to Say About Small Business appeared first on Fundera Ledger.
from Fundera Ledger https://www.fundera.com/blog/2016/10/20/gary-johnson-small-business