On full display at last week’s Small Business Summit sponsored by the US Chamber of Commerce in Washington, DC was the FUD Factor: Fear, Uncertainty, Doubt. No matter the subject, no matter the speaker, no matter the industry, the frustration of America’s job creation entrepreneurs permeated the entire 4 days.
Certainly many are still successful even during this lingering recession, but they fear for their future and the future of their country – a country recognized by all as unique in the world of commerce for creating enormous opportunity often using little more than sweat equity.
US Chamber of Commerce chief economist Dr. Martin Regalia didn’t provide much reason for optimism and predicted a continuing roller coaster ride during 2012. While Armagedden wasn’t mentioned, Taxmagedden was. If the grid-locked Congress doesn’t act soon, in just 7 months Americans will see the biggest tax increase in US history with an additional $500 billion in taxes being levied against America’s taxpayers and most directed against America’s still suffering small business owners.
It’s easy to add them up: expiration of the AMT fix, expiration of the reduced FICA taxes, Obamacare taxes kick in, R&D tax credits expire, deductions for state and local taxes expire, and of course the elephant in the room with the expiration of the rest of the so called “Bush tax cuts”.
Entrepreneurs have every reason to be frustrated and scared. Conversations with regulators and some legislators show they just don’t get it. For example the White House touts their new initiative to have all agencies scour their books for regulations that don’t make any sense and do what they can to eliminate them, even asking them to look back 20 years. The point was made however that if a regulation has been on the books for 20 years, even though it may be dumb and onerous, small business owners have figured out how to work through (or around) it. They have set up their business processes and procedures and even their product offerings to comply with existing regulations. Removing unnecessary regulations may be the honorable thing to do, but it certainly does not improve profits or encourage a small business to hire more people; it simply creates more administrative reshuffling.
The hits to small business owners just keep on coming!
Let unsaid by the White House representatives was the amazing fact that agencies are poised to release 62 new regulations affecting business in the next 30 days. A quick look at the pending federal regulations web site shows 6,283 new proposed regulations have been posted in the last 90 days. It is simply impossible to keep track of them all and impossible for small business owners to gain a steady footing for their business on the constantly shifting sands of federal regulations.
Two words – Just Stop
President Reagan understood the FUD Factor and he understood the burden federal regulations place on entrepreneurs and their ability to create wealth and jobs. One of his first acts after being sworn in as President was a January 29, 1981 order directing every federal agency to – Just Stop! All pending regulations and all proposed regulations were to be put on hold. He prefaced the cease and desist order by stating that “among his priorities as President is the establishment of a new regulatory oversight process that will lead to less burdensome and more rational federal regulation”. He ended by saying, “This review is especially necessary in the economic climate we have inherited.”
Those attending the Small Business Summit expressed hope that whoever leads the next Administration will understand the wisdom of President Reagan’s order. Constant uncertainty about taxes and rules is the one thing entrepreneurs cannot tolerate.
Fear of what might be coming down next, Uncertainty about the direction of a new Congress and possibly a new Administration, and Doubt that anything will really change. In the meantime, entrepreneurs will not expand, they will not hire and they will not grow.