Joe Pitts, April 25, 2008

If you are not employed by a small business, chances are high that your neighbor, a family member, or best friend is. In fact, small businesses employ a full half of all the private sector employees in the United States. In this light, President Bush designated April 20-26 as Small Business Week. Every President has done the same since 1963. Small businesses play a key role in the United States economy and in the very fabric of our nation. Indeed, the entrepreneurial spirit embodied by our nation’s small businesses captures the very essence of what defines America as the land of opportunity.

Small businesses are instrumental in the civic makeup of our communities. Their owners and employees are our friends and neighbors. Many small business owners also work long hours and operate on razor thin margins to make their dream a reality. In our fast paced and continually innovating marketplace, the nation relies on small businesses for the new ideas, products, and jobs that make a strong economy. For all the sacrifices these entrepreneurs make and for all they give to our communities and country, Small Business Week is an opportunity to say thank you.

And I propose Congress say thank you by passing legislation that helps small businesses thrive, and make the U.S. economy strong in the process. Many of the issues that confront small businesses are emblematic of the wider issues facing both individuals and businesses in our economy.

According to the Small Business Administration, very small firms, those with fewer than 20 employees, annually spend 45 percent more per employee than larger firms to comply with federal regulations. These very small firms spend 67 percent more per employee on tax compliance than their larger counterparts. Let’s cut the red tape and simplify the tax code.

Another serious issue facing our small businesses is the cost and availability of health insurance. Small businesses often struggle to meet the high cost of providing health insurance to their employees. Let’s pass legislation that would end the bias in the tax code that provides tax breaks to employers who provide health coverage but not to individuals that wish to purchase their own, portable health coverage.

By empowering individuals to obtain their own health insurance directly, we would be solving a small business problem while keeping more individuals insured. When people buy their own insurance, they do not need to worry about a change in employment leaving them without health coverage. This solution would help relieve a major burden for small businesses while encouraging individuals to own their own, portable health coverage. As an added benefit, this would also enhance competition, and thus improve consumer options.

Let’s also provide tax relief that encourages our small businesses to invest in the assets that help to grow business. The Economic Growth Act, of which I am a cosponsor, would allow businesses to immediately expense -- or fully deduct on their tax returns -- the costs of assets during the year in which they buy them. Currently, businesses can only take limited deductions for the cost of such assets over a number of years. By uncapping and accelerating business expensing, we would be providing a major motivation for small businesses to acquire the assets they need to grow, which will undoubtedly lead to expansion and job creation.

Congress should also make the tax cuts from 2001 and 2003 permanent. Many small businesses are not incorporated, so their owners pay taxes as individuals. Many of the "millionaires" liberals in Congress want to raise taxes on are really struggling small businesses that would have to lay people off or event close their doors if their taxes went up. If Congress does not pass legislation to reverse the course, by 2011, tax rates for nearly all brackets will increase -- some by as much as five percent. Raising taxes is the not the way to make our economy competitive.

Small businesses are extremely important to our economy. Many small business owners sink their lives into their businesses because they believe they have something to offer that consumers need. Small businesses are incubators for big inventions and big ideas. It is difficult enough to start a business from scratch. Congress should remove the barriers that impede small business success and pass legislation that provides an environment for entrepreneurship to thrive. Nothing less than the health of our economy relies on it.

Congressman Joe Pitts, a Republican, represents Pennsylvania's 16th Congressional District, which includes Lancaster County and parts of Chester County and Berks County.