The House Small Business Committee heard from a panel of entrepreneurs and small business experts about how to help cut through bureaucratic red tape in order to grow the economy on Wednesday.
The hearing came on the heels of National Small Business Week. Witnesses discussed ways Congress could simplify the tax code, eliminate overbearing or unnecessary regulations, and improve small business education outreach. It featured testimony from J.J. Ramberg, an entrepreneur and host of MSNBC’s “Your Business,” Susan Solovic, entrepreneur and media director for the Small Business and Entrepreneurship Council, Ramon Ray, editor of Smart Hustle Magazine, and Melinda Emerson, the founder and CEO of Quintessence Group. Each shared stories of founding and running a business in America as well as ideas on how Congress can make that easier.
Committee Chairman Steve Chabot (R-Ohio) said the hearing was an important step in helping congressmen understand the needs of entrepreneurs.
“It is often said that when small businesses succeed, America succeeds,” Chabot said. “At the very heart of small business — what allows them to succeed — are the people; the men and women of this country who set out with an idea and the desire to turn that idea into a reality. It is this enduring spirit of American innovation that continues to breathe life into our economy and create the jobs no government program can.”
Solovic said over-regulation is a major concern for entrepreneurs and warned it could lead to the end of small business as we know it.
“At the very heart of small business — what allows them to succeed — are the people; the men and women of this country who set out with an idea and the desire to turn that idea into a reality.”
“The regulatory burden in this country is in the trillions of dollars and small businesses pay 36 percent more than larger enterprises,” she said. “Could small businesses in the U.S. eventually become extinct? In my opinion, if we continue down this path of hyper-regulation, they will certainly become an endangered species. How can we protect this important market sector? As one long-time entrepreneur said to me when I asked what needs to be done: Get out of our business.”
Emerson pointed at the changing definition of independent contractors as a specific example of the way confusing and burdensome regulation can harm small businesses.
“There are other regulatory challenges that small businesses face that should be reviewed,” she said. “The expanded categorization of who can and cannot be considered a 1099 independent contractor is a challenge for small businesses and the cost of full-time employees is prohibitive to cash-strapped start-ups. The tax code needs to be simplified to help more small business owners; it costs a lot to be in business in the U.S.”
Ramberg said though small businesses face many struggles in the current economy there is a lot of reason to hope.
“Both on and off Main Street, we have heard a common refrain: difficulty finding affordable funding to expand, a challenge around recruiting top notch employees and a sense of loneliness and lack of community to help with business issues,” Ramberg testified. “That said, I believe we are in the beginning of a sweeping change when it comes to small business. Companies in the fintech and edtech space are working to address the issues of financing business and educating our workforce.”
She went on to predict that the next generation of entrepreneurs would bring a new level of change to the economy. “With Millennials now making up the largest share of the American workforce and primed to take over an increasing share of small business ownership, much will continue to change when it comes to entrepreneurship,” she said.
Ray told the committee the key to helping small businesses was cutting through barriers that they face like confusing taxes and regulations.
“Let’s think about the husband and wife who start a business together, or a high school graduate working on an invention, or that laid off 50 year old forced to begin their own business,” Ray said. “The best thing our government can do for small business owners, is to have limited regulation, lower and simplified taxes and continue to invest in the education of small business owners at the local, state and Federal level.”
Stephen Gutowski is a contributor for Opportunity Lives. You can follow him on Twitter @StephenGutowski.