Editorial

Small business issues require more than federal advocacy; they require real change

May 6, 2016
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Grand Rapids is home base for a large community of small businesses and entrepreneurial efforts, all well-versed in the complexities, ambiguous terms, technical language and overwhelming array of federal regulations.

Sen. Gary Peters, D-Michigan, has introduced the SEC Small Business Advocate Act to establish lines of communication between small businesses and the federal government, but the Business Journal is skeptical in regard to its helpfulness.

National Small Business Association reports show small employers make up 99.7 percent of all employers in the country, and one-in-two workers in the private sector run or work for a small business. Small businesses in Michigan represent 98 percent of all Michigan businesses and 50 percent of the state’s workforce.

Grand Rapids business owners have long been proactively involved in “communicating” with the federal government and through established channels like the Small Business Administration of Michigan and the NSBA.

Little more than one year ago, Grand Rapids business owner Cynthia Kay, owner of CK and Co. Media Production, sat as a witness to the House Committee on Small Business and testified at length in regard to the several federal small business impediments that create impenetrable walls to hiring, growing a business, technological upgrades and defending cyber attacks. One year later, the Business Journal report on Peters’ legislation revises the same dogged concerns and adds the voice of Aaron Schaap, founder of The Factory and Elevator Up, both in Grand Rapids.

Kay told the House committee, “Firms with fewer than 20 employees spend 36 percent more per employee than larger firms to comply with federal regulations, amounting to an average cost of $10,585 per employee, per year.”

That “average” didn’t even include ever-escalating health care costs.

The number of small businesses equates to a majority and should be seen as such. That Peters’ bill would focus on SEC communication is important, but not merely to warehouse the issues brought time and again. Instead, real changes must be made when it comes to access to capital and tax impediments. Small businesses pay higher taxes on income than multinational, multi-billion dollar corporations. As Peters notes, the Jobs Act was significant in recognizing crowd funding. In fact, Title III of the Jobs Act becomes effective May 16.

Small business owners have been clear about the obstacles in SEC rules and the tax code(s) and quite clear in the ultimate costs: hiring new employees and expanding businesses.

True advocacy requires more than “established lines of communication.”

It requires real change.

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