Policies Matter. So Does Your Feedback.

By Adam Waldeck on November 2, 2009 10:26 PM
Hiring.jpgPolicies matter. As simple as that may seem, it's unfortunately a hard concept for many of our elected officials to get their heads around.

For example, it is no coincidence that Texas, with its low taxes, reasonable regulations, and economic incentives like the Texas Enterprise Fund, created 70% of the new jobs in the United States between 2007 and 2008.

Conversely, it is no coincidence that soaring property taxes, massive spending and out of control regulation have brought California, with record high unemployment, to the point that Sacramento was literally issuing IOU's.

If we hope to get our economy on the right track, it's important that we have the right policies that unleash the potential of the real job creators in America - our small business men and women.

But developing the right policies for small business owners to create jobs requires actually listening to small business owners, and understanding what would work and what would not.

So, as someone that is either self-employed or a small business owner, we'd like to know what you think of the 6 potential solutions that we've outlined below. If they are the right solutions, how would they help? If they're not right, why not? What would you add?

Every single bit of feedback is helpful, so please have at it in the comments section.

1.   Immediate Payroll Tax Relief.

Whereas many people do not pay the income tax but do pay the payroll tax, a two-year, 50% reduction of the payroll tax would immediately boost take home pay for every employee, and dramatically free up available cash for every small business employer to hire and invest. (Calculate how much money you would save).

Among other sources, this would be paid for with the $300 to $400 billion of the unspent "stimulus" spending authorized in February.

2.   Incentives for Small Business Investment. Allow small businesses to expense 100% of new equipment purchases each year to help them invest in new, more productive technologies.

3.   Abolish Taxes on Capital Gains. Matching the Chinese capital gains rate of zero is relatively inexpensive in the current economy because people are going to have smaller gains. In the 1970's, this is the rate that Alan Greenspan testified was best for economic growth.

4.   Reduce the Corporate Tax Rate. Combining state and federal taxes, America has the highest corporate tax system in the world. Matching the Irish corporate tax rate of 12.5%, combined with zero capital gains, will make America the most desirable economy in the world to invest in.

5.   Abolish the Death Tax. Inheritance is the most powerful accumulator of capital and eliminating the death tax has been consistently supported by over 75% of the American people.

6.   Reduce Spending and Reform Government to Achieve a Balanced Budget as Rapidly as Possible. While Newt Gingrich was Speaker, federal spending rose by an average of 2.9% a year, the lowest increase since Calvin Coolidge in the 1920's. We can apply the same principles that worked from 1995 to 1998 and create a balanced budget with a smaller government with lower spending, lower interest rates, and less debt.

50 Comments

Our foreign aid programs are out of control. Review and revise every FA program - reducing our out of control spending and help to other countries when we are the ones who need the help to balance our own budget!

Allow Sole Proprietors to deduct their medical insurance premiums on Schedule C, not as an adjustment to adjusted gross income.

Numbers 1, 5 & 6 are right on as far as creating jobs and getting the economy moving! The others are reaching and will give the ultra rich and big corporations the advantage more than small business. Hold the capital gains where it's at.

As the part owner in two samll businesses - all of these are great! In addition - leave health insurance options open for small businesses (NO government mandates of any kind!). What works for one does not necessarily work for others. Forcing us all to pay the same kind of premiums for all workers in every industry will leave some of us bankrupt. I agree with Gerry about allowing owners to deduct health insurance premiums but please extend it to all non-corporate individuals (i.e. partnerships). Also - continue to fight, fight, fight the cap and trade proposed legislation. This has the long-term capability of shutting down most small businesses in every industry in a very insidious, creeping sort of way.

The most important aspects to our company are reducing income tax and payroll tax, and being able to expense 100% of new equipment purchases in the first year. All of your goals are appropriate.

As a comment, it is critical that the Cap and Trade and Card Check bills be defeated. I am very disconcerted about Mr. Gingrich's endorsement of Dede Scozzafava who clearly supported these bills. I have had great respect for Mr. Gingrich, but have lost confidence in him and American Solutions because he didn't stand up for the principles that this organization espouses.

Creating jobs will happen if small businesses are allowed to compete fairly. Stop the government take over of health care, stop government cap and trade, and stop the unfair taxation of all businesses. All that just raises costs for nothing but laggards to get money. Working people deserve their money and we are glad to pay them.

Here is the way I see it. We have several problems as a nation. (1) We have dishonest politicians who want nothing but their own power. (2) We have a tax code that is grossly unfair and aids the politicians. (3) As a result of the tax code, we have an employment problem and jobs going overseas. (4) We have an educational problem and our children are being indoctrinated by communist teachers.

I am against the things listed and I'll tell you why. They don't address the underlying problems. I have two words that will fix the first three problems that I mentioned. FAIR TAX--it will take away the politicians power by eliminating the tax code and replacing it with a national sales tax. It will force the politicians to be more honest, no more hiding behind half truths. It will make the United States the most comtetitive place on earth to do business and creat many jobs here in the United States- companies will not have to leave the US to produce.

Why Newt is not supporting this, I do not know. Perhaps it is because he is a politician and doesn't want to give up that much power.

If you are not familiar with the FAIR TAX, go to www.fairtaxnation.com and study it. It is an idea that can transform the US in a very positive way.

We need to stop electing people who continue to spend money we don't have..

I want to give you another web site for the FAIR TAX. It is www.fairtax.org. I believe that once you begin to understand the FAIR TAX you will want to support it. Mike Huckabee is a supporter and many others.

I agree with all 6 items as an initial step. But we need to go further with tax reform, tort reform, better stream-lined over-sight and regulation, increased competition in heavily regulated industries, and other areas.

The standards you set are a good start. I would suggest also adding the following: Reduce the payroll tax permanently on both employee and employer; raise the age to 70 instead of 66 at which full social security benefits pertain; eliminate SSI; prohibit the government from tapping the social security funds for use in the general funds so that the social security money may only be used for social security expenditures; put a cap on spending at some preset % of GDP; establish term limits for senators and congressmen; require the federal government to undergo a regular (annnual) audit of its books performed by an independent public accounting firm; change welfare entitlement programs so the recipients are clearly such for a short, predetermined time rather than eligible for an open-ended time frame; restructure the income tax brackets such that everyone must pay something; require a balanced budget from federal government every year; trim the size and expense of federal government by making an across-the-board 10% actual spending cut (not a "cut" of the rate of increase) for each of the next 5 years;

I totally agree with all of these but I think some prioritizing might allow us to focus on these one or two at a time. The first 2 would help bring us out of this slump the fastest. Operating capital is hard to come by these days and these are enormously important to stimulate business activity. This is not meant to minimize any of the others, it just helps me to break down issues from a wish list to an orderly process to more realistically move forward. For me, this would be more the order of priority.

1.)Cut the payroll tax in half for two years, including both the employee and employer match.
2.)Allow small business to expense 100% of new equipment purchases each year.
3.)Match China and abolish the capital gains tax.
4.)Match Ireland's corporate tax rate of 12.5%.
5.)Abolish the Death Tax.
6.)Balance the federal budget within 7 years by controlling spending and reforming government.

If we really want to jump start the economy and create jobs, I beleive the tax issues, stated above, are a good start. However, I beleive that they will take more time than can help in the short term. In the short term, the banks need to lend for residential and commercial projects again. Responsibly this time!! There are so many city and urban neighborhoods that are dying or falling apart. Use the stimulas money to knock them all down, creating hundreds of thousands of jobs, raising the land value, raising the tax base, and give them back to the owners at a 2% mortage for 10 years.
(the "trickle" will contiune far down the ladder)The commercial sector will follow. If Big Government wants a small part, they can guaranty the loans, Otherwise stay out of the way and let "us" business people show them how it is done!

I am called an entrepenuer by some people, but all I know is 44 years of hard work! For the first time in my life, I have contemplated selling everything I have worked so hard to build and move from the U.S. like many of my friends. I feel that big government and higher taxes have killed the spirit of small business people. I think it is time to clean house and put term limits on Washington. I agree with your six policies, but we must do more to protect our children and grandchildren from a government that is out of control.

These are all good solutions; however, the biggest obstacle is getting the American Public to understand the importance of these solutions and that these solutions are what America needs and wants. Democrat and Republican politicians alike are beholden to the special interests that pay for their campaigns. We need a different politician, one that will be honest with their constituents, one that will refuse to govern based upon special interests, and one that will make decisions that will improve the country as a whole.(there will be pain involved) The way to do that is to educate the American Public on all issues and to institute term limits for "every" elected official. I believe that this is going to take a grass roots effort that takes the message (facts, figures, pros, cons; not political propaganda) to the neighborhoods of America; not the $15,000 a plate fund raisers that cater to the special interests. American Solutions needs to take the lead on this and I am willing to help; frankly it will be difficult to get blue collar America bought in unless we take the message directly to them!!! This will take hard work and sacrifice: not just $$$.

Any reduction in payroll and income taxes would be a big help.

Even a deducing purchases over 2 years would be a benefit.

Tax credits for training and hiring would be a great good job creator.

Good ideas, but what about the Fair Tax? Why not push hard for it?

I agree with your points. The most important step though is perhaps the hardest of all to do. We have a wound and need to stop the bleeding first to save the patient (our economy). This is the six steps and a few others that have been mentioned already. Once the patient is stabilized, we have to go in and surgically remove the tumors (corrupt politicians and bad taxes). Term limits for sure and annual job performance hearings maybe. This has got to stop. Government is like FAT. We need a certain lean amount to survive but too much of it will make us obese and unhealthy which is exactly where we are today.

I have no problem with the six points above but the two critical issues to-day are the bill proposed for health care in the House and cap-and-trade in the Senate. We must devote all our time and treasure to-day to defeat these bills. There is no other issue to-day as important as defeating these bills. We must not be seduced into letting our forces be divided and conquered by our own competing objectives. The clear, basic purpose of each bill is total control over Americans. Period. Never in the history of our country have we experienced such a naked and massive power grab. If we do not defeat these bills to-day the rest is academic. There will be no small business or middle class in America.

In addition, back off the licenses for small business owners. In my hopitality business I am required to purchase 7 licenses/permits annually from the city of Buffalo. One being a "dance license" so patrons can dance in a bar. This license screams "greed & power". We pay them to come up with this kind of junk?? Also the welfare syatem is draining everyone. It needs to be a temporary solution while in between jobs, not a permanent lifestyle that people can constantly find ways to take more of it. What else can I/we do to get all these solutions in effect??

I think we should also support the Association Health Care plan. Getting health insurance competitive nationwide would almost certainly lower costs.

I agree with the 6 recommendations. Taxes kill small business. America was built on small businesses. I don't like to see just large business surviving and don't like to see them have to leave the country to survive. My family survives on a small business but would do better if business taxes were lower.

Our country needs to be run as a small business. What is our government thinking of? We should have elected Ross Perot.

I agree with these policies listed in the article. What I can't understand is why the most fair and ethical business in the world cannot make it into the mainstream. I am talking about network marketing. It is truly pay for performance and available for any entrepreneur to start a business.
The old pyramid argument has been proven false time and time again, proven by the "Brilliant Compensation Video" which can be seen at

http://DougLee.info

Donald Trump, Warren Buffett and several other big names own network marketing companies. I wish we could get some good press. The wealth that could be generated in this country if we had a network marketing revolution would be huge.
A good product offered by a network marketing affiliate and you got an outstanding system that is duplicated thousands of times over.
That's my 2 cents.

Doug Lee
http://DougLee.myGeneWize.com

I agree with all six ploicies, Mary Beth, but I cannot sign the petition. You see, I support doing away with ALL apyroll tax, ALL capitol gains tax, ALL corporate tax and ALL of the death tax. Item 5 disappears in such a case. Item six is a no-brainer and I agree whole-heartedly.

You see, I support the FairTax bill. Do away with the IRS and the income tax altogether and create a national sales tax. (Not a value added tax).

This is the only way to get the government out of our lives that I can see.

Guess I should have proof-read my submittal!

I, too, am a small business owner. I plan my equipment purchases and income to avoid taxes and minimize taxes. What kind of way is that to run a business?

I have no employees! It saves me a bundle to avoid the expense of payroll taxes. Our tax system distorts our economic system profoundly and limits our growth and our potential.

Washington just doesn't get it.

Doug, our health care system will continue to get more expensive until we let the market adjust to reality.

The reality is that new drugs are and will be expensive. We choose to take expensive drugs because the insurance copay makes it cost effective for us. We pay the hidden cost in higher insurance premiums. People who take a lot of drugs are ushered out of their health insurance carriers and those who take few drugs support those who take a lot.

Doctors request tests and procedures that are prescribed to protect them from a predatory legal system and to reduce their astronomical liability insurance.

Something has got to give.

1. Tort reform. Doctors who are sued should not be liable for legal expenses of the plaintiffs.
2. Doctors should be liable for lost income in cases where they mess up but not punitive damages.
3. We should be able to use drugs form outside the U.S.
4. Docvtors, drug companies and insurance companies should not be able to own each other's businesses. That is a conflict of interest.
5. Insurance companies should compete nationally.
6. It's ok to not be insured. Medicine is a business. The service of medicine is competitive. We should all make health care decisions based on our economic ability.

Let the health care system settle back to a balance of supply and demand and the cost of health care will settle down to a reasonable level. If we accepted the helth care system of 1990, we all could afford it. Today's system is so wonderful that we forget that new means expensive.

After all, a 42" LCD TV now costs $600 to $1000. The newest technology is twice that amount. Which can you afford?

Government is suppose to Protect the People ... not Socialize them.

In addition to the 6 ...
7. Abolish the IRS and enact a flat tax.
8. Abolish all social programs including welfare.
9. Do NOT force anyone to buy health care.
10. Tort reform and eliminate all corruption and waste in Washington, Medicare, Medicaid, etc.
11. Abolish the Fed.
12. Term limits for the Washington idiots.

I would like to see our country return to pre FDR!

I am a physician and I run a small business - my practice. i do my own quarterly taxes and I KNOW what the costs of FICA and Medicare are on my payroll.

I agree will ALL the points which will restore the private marketplace, competition, control prices and create real jobs.


Just so you know, the cost of healthcare may be rising - but

Surgeons re-imbursement for services has DECREASED 53% in the last 10 years.

I get paid $420 for removing your Gallbladder laparoscopically, and caring for you for 3 months afterward. Thats less than a manicure, hair cut and color job, but people complain about doctors fees. LOOK at what is actually paid to the doctor.

If Obamacare passes and anymore medicare cuts take place, the majority of physicians will dis-enroll from Medicare and the system will collapse. If you want care you will have to pay for it just like groceries, gas, and movie tickets.

We have one chance to save the country and this is the way.

First, we have to drain the swamp.
Term limits for each level of representative government.
Starting with THIS Congress, each individual who has served more that two terms should be ineligible for additional service.
Until the electorial system is changed, the population which is entitlement oriented, will continue to have an ever increasing influence over the rest of population which actually works and pays taxes.

My business celebrates its 40th anniversary this year. We are still functioning in spite of the various depressions and torture from government interference.

The 6 points from American Solutions are a "No Brainer". Lets do evrything we can to get the government out of our lives. Just leave us alone and America will prosper.

I agree with all of your suggestions, and almost all of the additional suggestions made in the many comments above. However, I think we are trying to treat the symptoms and not the disease. I don't think we are doing anything that will truly have a long term impact, unless we return to being a production based economy, instead of a consumer based economy. What do we provide to the world economy? I think its fair to say that, for the most part,we provide a market place. We can't get enough of the lower cost (and often higher quality) goods made in China, or Japan, or some other part of the globe. But what are we going to eventually pay for these goodies with? If we don't manufacture a sufficient quantity goods that are attractive to consumers either domestically or internationally, than American manufacturers will continue to be replaced by forign manufacturers, production jobs will continue to disappear, and eventually service sector and financial jobs have to follow suit. Yet our leaders in congress propose "cap and trade", and want to run one sixth of the economy on tax dollars, and worry about endangered snails, and won't let us drill our own gas and oil, etcetera, etcetera. If we don't wake up, the amount we pay in capital gains or payroll taxes won't matter anymore.

Newt needs to explain his political misstake with regard to the New York #23 election - and how Republicans could have endorsed a radical candidate in the first place.

Think bigger:
1. Give us and our employees the opportunity to opt out of Social Security and Medicare. Those of us who responsibly save for our future will never see a dime of benefit anyway once means testing is enacted.
2. Fair Tax. Eliminate all the taxes, except one--the Fair Tax. Stop manipulating our lives with tax policy.
3. Reduce spending. Balancing the budget is not enough. That leaves the size of government unconstrained as long as they continue to steal from the fruits of our labor. Let's force respect for the constitution and limited government through aggressive court challenges.
4. Vote with our pocket books against government intrusion into business. Boycott any business that is in bed with the government (i.e. sells to the government, is subsidized by the government, lobbies the government, exists only because of the government, takes bailouts, etc.).

4, 5 and 6 will provide good will toward the small businesses. Cutting red tape in city and county processes will help as well. Stop the duplication, days of no action and introduce county and city worker evaluation and incentives for productivity like we do in small businesses.
Entitlement areas in gov't need to be reviewed and updated with faze-out clauses as needed. No new law passed should have a free run. They need to be reviewed, dead areas removed and productive areas increased. But that should eventually be handled at the local level of gov't not national level.
Tort reform is a must in all areas. Doctors are getting a raw deal right now.
Insurance should be available without state line restrictions in all areas. Competition is always good for everyone. We need to get back to basics.

Please urge congress and the senate to show us how wonderful the health insurance plan they are trying to railroad us into, to sign up for the exact same program! If they did, count me in as a supporter, if not tell them to blow some more smoke up someone else! Thank you

Why cut the tax 50% for two years. LETS ENACT THE FAIR TAX!!!! Then we run our bussiness the way it should be and not having to send our income to washington. WHen we spend we pay taxes. This would bring lots of bussiness and capital back home!!!

Thank you

As a former veteran, I have a small business now, making products right here in the USA www.drainplugmagnets.com . I help people to extend the life of their engines.From lawn mowers to cars and trucks, saving oil as well.

It is tough to hire more people because of all the regulations and expense associated with the hiring, it's not even the salary, it's the stuff other countries do not have to address. Not a level playing field!

I would like to see Governor Huckabee as President who would enact the Fair Tax as a start along with the points made in your blog. Before that can happen you know what we have to do in 2010.

I like those ideas outlined. That is what Reagan did. It works. The policies of these radicals in DC do NOT work, they did not work during the depression, and they will not work now. The Nationalized health care, is unconstitutional. Castro, Stalin, and Hitler all got their countries into national health care, so they could better control (absolutely) the populus.

Many of the suggestions are excellent. However we need to examine and understand why government keeps wanting more money and I don't just mean the Federal government. Of course the more government takes the more they control our lives. Mores taxes less freedom ! This is not complex but it is hard to stop.

We all know about the waste, fraud and excess in taxpayer funded entitlements(SS, Medicare, medicaid) but a huge one we hardly ever discuss is as follows:

If I told you that you could have a job with middle to upper middle class pay, 100% health care paid by your employer, great vacation package, every conceivable holiday off with pay, yearly pay increases and you could retire after 30-35 years with 80-90% of your salary with yearly COLA increases you would think I must describing a very well paid management person for a private firm. Of course, you would be wrong !
On top of everything else this individual has virtually lifetime employment security !
I am talking about government employees at every level of
government !

To my knowledge government and government entities NEVER enact pay or benefit cuts. They will perhaps grudingly layoff some employees when times get lean but they continue to maintain and increase their pay and cadillac benefits among which are excessively generous retirement benefits that begin at an early age.

The non-governmental employee has to accept Social Security and work until 66 or 70 to get a small fraction of what government employees receive and not even own their benefits- if they die they get $250!

This is the big reason for government and government unions to keep expanding- to take care of themselves at everyone elses expense. Of course, government employees have family members who may not be government employees but they will support th ebread winner. Of course we need government but at a reasonable and affordable level. What we have is a MONSTER that keeps wanting to be fed.

So what is the solution. Make the public aware of this nonsense in your own community/county. You will find what I am saying is true. It is the dirty secret of government spending that makes our taxes go higher and higher. Vote no on any and all tax issues until government employees benefits and retirement are reduced to a more reasonable level that reflect what average taxpayers are getting. Speak out and write to your elected officals and newspapers at all levels on this issue.

Back in the beginning of this recession I thought of a recovery plan that goes as follows.

15% corporate tax
15% income tax
15% capital gains tax

I believe this would ignite the economic engine like few times in our history.

I know thats a pipe dream with our current president who is more interested in building his socialist utopia than anything else.

Enact a FAIR TAX system! Pay as you go, instead of pay Uncle Sam upfront. While you struggle to keep your head above water, good old Uncle Sam is spending & handing out your hard earned dollar to a bunch of Entitlement/Welfare recipients. Points 1 -5 would be mute if we had FAIR TAX. If you are a small business owner as myself, it would greatly behoove you to read up on this Fair Tax system & support implementation of this system ASAP! When considering who to elect for 2010 & 2012, check to see if that person supports FAIR TAX.

A balanced budget amendment, term limits, And cut the payroll taxes permanently. I've been a small business owner for 34 years and what I'm witnessing right now makes jimmy carter et al look good. Wake up people!

David, I agree with you. All these TAXES will be gone with the FAIR TAX. I also agree with you that the politians do not want it because they will lose the power. I believe that they should all be voted out of office. This country is headed for a revolution.

These policies sound absolutely perfect to me. They would of course have a cost: cutting government expenditures likely means trimming entitlements and services. So be it - I'll take opportunity over entitlement any day. That's what freedom is all about. Incidentally, my favorite potential legislation, the Fairtax, dovetails with these objectives perfectly.

The only losers in the equation are the Washington power brokers - good news for everyone else in the country! I sincerely hope we can successfully make the return to common sense and prosperity.

Every one of the suggested solutions have substantial merit. Believing that they are going to become a reality with the present situation in Washington DC is sheer fantasy. Obama, Pelosi and Reid know that they don't have to listen to us, the unwashed! Surely you heard them all say, very emphatically, that passing of the health bill through congress was a great thing for THE PEOPLE. I must have misread all those signs at the 912 march. I could have sworn they were saying "keep your hands off my health care" and "less government"! The answer is that those of us still remaining who have not succumb to eating out of the public trough must become active. We must get up off our couches;stop watching the reality shows, work for and actively support true conservatives who believe in less taxes, less government,that God is the core to our Republic;telling the truth is paramount and that their job is representing us not building their power base. Can it be done? Yes, not only can it be done,IT MUST BE DONE and done quickly.

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All great pro-growth actions!

I wish more people were talking about States' Rights and the 10th Amendment. This is the long term answer to diffusing the power base in Washington and putting the real power back in the hands of the states, as the founding Fathers desired. Too much power vested in too few individuals, is where we are now.

Lets do all of the items mentioned herein, but we have to begin to elect local and state politicians who believe in the states taking back the power from the Feds and let each state operate as an incubator of ideas. This was brilliantly thought out and provided for by our founding Fathers.

If you don't agree with how "your state" is governed, (such as passing an illegal mandatory health care legislation), you simply move to a state that better reflects your ideology.

This will make the States compete for citizens in the free market, just like the consumer products that we buy each and every day. Let the best State win!. If you don't want government in every nuance of your life, you move to a state where there is less government involvement.

There are several States, like Texas, Montana and others, that are currently laying the ground work for taking the power back from Washington and we need more states to follow suit.

I think I am going to move to Texas!

Everyone agrees that small business is the backbone of the country. Let them keep more of their hard earned money and they will do more of what they have been doing all along - creating jobs! This will in turn lead to more money spent and higher tax revenues. We need to stop giving entitlements at every turn. Captain John Smith said something that made sense when he said "He that will not work, shall not eat." Not too surprisingly, productivity soared.

The one change that would bring the greatest positive benefit to the U.S. economy, now and for future generations, would be to slay the dragon known as the IRS and implement the FairTax. And it will only happen when:

1) a strong majority of the voting public are aware of the FairTax and why it would create a dramatically improved economic climate in the U.S.

2) an informed voting public puts enough pressure on elected officials to force them to recognize the will of the people.

If people lack the courage to vote out encumbents who are happy with the present, chronically-abused system, it will be business as usual, and the country will continue its downward slide. Every voter should serve notice to his or her elected officials and their challengers that this issue is a deal-breaker.

Check out jackiemillerforcongress.com
She is an Independent here in Tenn. who has incorporated many of our "American Solutions" Please help support this woman in anyway you all can. As a small business person crushed by Washington she will go to Congress as a real person with real solutions as a real reformer.

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