A New Rite of Spring

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In the spirit of the rebirth that spring gives us each year…

I would like to propose a simple idea that would spark a rebirth in US entrepreneurship…

A new rite of spring, as it were.

Because, as The Wall Street Journal reported in yesterday’s edition, corporate America is doing very well...

With lots of cash on hand, plenty of business to business activity…

And rising profits.

But the problem is, in the wake of the Financial Crisis of 2008, they’re hiring fewer Americans...

And doing more of their hiring overseas…

Where labor costs are lower and taxes are lower.

But wait a minute, aren’t manufacturing jobs coming back to the US?

Some are, it’s true; but not enough of them and not quickly enough to really create enough jobs when they’re needed, which is right now.

So given the fact corporate America has moved many of their jobs overseas…

Where will the new jobs come from?

No More “Obama” Jobs

And I don’t mean “Obama jobs” that don’t add productivity to the economy but only dependency...

I mean real jobs where wealth is created, people are hired and productivity is the result.

Well, believe it or not, small businesses are still the largest source of jobs in this country…

Providing over 65% of all new jobs to Americans…

Which is greater even than the number of Americans receiving federal assistance under the Obama Administration…

And that’s really saying something, since more Americans are on the dole than ever before…

And more Americans are not working than ever before.

So, what’s my proposition?

Nothing that is difficult or hard to understand…just common sense.

I propose that anyone starting a small business be exempt from paying federal income taxes for a certain period of time.

And I would suggest that states to do the same.

Secondly, I would make it easier to create a small business by eliminating costly regulations and fees that take precious capital from the hands of entrepreneurs…

Leaving less to invest in their enterprise.

Is this a new idea?

Not at all.

But it is effective. Just look at where the economy is booming in this country and where it is not.

Let’s look at the two biggest states in the lower 48, for example.

California, the golden state, has one of the highest tax rates in the country, and has a very anti-business environment and is full of high fees and costly rules and regulations.

For example, personal income tax, which is what most small businesses pay, is 9.3% at $46,349 income level…

Those earning over $1 million a year pay the 10.3% rate.

Add to that sales tax, which is highest in the country at 7.25%, capital gains tax of 9.3%, and gas tax of 65 cents a gallon, and you have a perfect storm pushing small businesses away from the state.

And, California runs constant deficits, has the highest number of welfare recipients in the nation, and a very leftist legislature.

Its high taxes and extreme anti-business climate allow business poachers from other states to show California businesses annual savings between 20 to 40 percent after moving from the “golden state.”

As a result, businesses are fleeing the state in record numbers.

And the unemployment rate is 10.9%...

With the national rate at 8.2%

California is an example of what not to do to grow the economy and create jobs.

But where are the businesses that leave California going?

Well, quite a lot of them are ending up in Texas.

Texas, compared to California, is booming.

The unemployment rate in Texas is 7.1%, 14% less than the national rate, and 35% less than California.

Why is that?

Two Ingredients of Job Creation

Two very good reasons…

Texas has no personal or corporate income taxes, where California is among the highest in both…

And, Texas business regulations are minimal and California, again, leads the nation in business killing regulation.

That is why so many small businesses are moving to Texas.

In fact, California legislators have begun visiting Texas to understand why so many former California small businesses are now Texas businesses…

And one other idea I would suggest is to see corporate America become a larger source of small business capital…

Let federal tax codes give more incentive to putting capital to work in small businesses in the US, rather than abroad.

Also, reward small businesses when they hire more people…

Say, for example, for every third hire, their tax holiday extends another few months.

Not that this is set in stone, but you get the idea. Give businesses the chance to establish themselves and to grow…

Make it easier for capital to be invested in this country…

Give employers a reason and a reward for taking on new hires…

Don’t punish them with more taxes, more fees, and more threats of laws suits if they need to fire an underperforming employee.

Working Americans will still pay federal income taxes, but lower the amount everyone pays…

Right now, in many states, taxes and regulation are going the wrong direction…

And they certainly are doing so at the federal level.

Think I’m going too far?

I don’t…

What I’m talking about is the way things used to be…

When the business of America…was business...

That was before controlling the people became such a high priority…

And making Americans dependent upon the welfare state become national policy.

And those are…The Gorrie Details.

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