This is Part 3 of our series on campaign words. Many words and short phrases are used in campaigns and sometimes those phrases make voters think one thing when the words mean something else or mean nothing at all.
This time we look at the words “I support small business.” Those words are what every small business owner longs to hear. We like to hear it too. Conduit was formed in large part because small business is often forgotten at the state Capitol and small business seemed to be overlooked by the state Chamber of Commerce as they favor the interests of big corporations.
Unfortunately, many politicians who say “I support small business” deliver only good thoughts and nothing else.
We want to know, from the candidate:
- What are you going to do about the competitive disadvantage the state has created by giving big corporations grants and tax credits for which taxes on small businesses help to pay?
- What are you going to do to reduce government red tape and government delays?
- What are you going to do about Arkansas requiring more occupational licenses than most states which create barriers to get into business?
Having to compete against the big corporations to whom the state gives grants and tax credits. Too often big corporations get the breaks and small business are left to pay for the benefits given to big corporations. Supposedly tax breaks and grants (giveaways) to the big corporations help the big corporations grow, attract more people to the area, and then small business will benefit from increased business activity near the big corporations. Yet the reality is many small businesses find themselves on an unlevel playing field having to compete for business and employees against the big guys who have the advantage of state economic tax breaks and grants
To make matters worse, research by the Arkansas Center for Research in Economics at the University of Central Arkansas has cast doubt on whether these giveaways make any difference in whether a big corporation locates or expands in Arkansas. (See: Wasteful Spending –Quick Action Closing Fund)
Will the candidate do anything to curb faulty economic development giveaways to big corporations so the tax burden on small business can be reduced and to reduce the competitive advantage of taxpayer assisted big corporations?
Government red tape and government delays. We all have to deal with government red tape even if it is just to get your car registered. But you will be surprised by how many different state government agencies you have to deal with, how many regulations there are, and how many permits you must obtain just to break ground on a new business, even if it is something as seemingly simple as building and opening a restaurant. Will the candidate who says he supports small business work to cut unnecessary red tape and delays? If so, what exactly?
Over-licensure of occupations. Arkansas requires more occupational licenses than most states which is a barrier to starting a new occupation and opening a new business. An Arkansas committee of the legislature focused on over-licensure but the effort fizzled in 2021 with less than a handful of licenses being addressed and with one bill being hijacked to add another government program. (See: Curbing Occupational Licensing. Will It Succeed? Also see: Curbing Occupational Licensing – Status Report)
Is addressing over-licensure too hard for politicians? What if anything will the candidate do?
Using small business as an excuse. We would be remiss if we didn’t mention that sometimes the claim of helping small business has been nothing more than an excuse to grab more money out of your pocket without helping small business at all. In 2019 the politicians claimed they were helping mom and pop stores and other brick and mortar stores by passing the internet sales tax to make them bad old out-of-state stores pay sales tax. Supposedly collecting sales tax from out-of-state businesses would help level the playing field and cause more people to buy locally. Of course, it was all hogwash. First, Arkansas consumers, not out-of-state stores, pay the internet sales tax and it takes more money out of the pockets of consumers. Second, consumers weren’t buying from out of state businesses to save a few dollars on taxes. They were buying because of convenience and availability. Third, online sales have continued to skyrocket.
Whether you are “for” or “against” the internet sales tax is not the point. The point is small business got no benefit out of the tax. The real goal was to use small business as a cover to sell the bill so the state could get another pot of money from taxpayers.
One more thing. When Governor Asa Hutchinson shut down business during the first months of COVID-19, it was the small businesses that took the hit while big box stores were able to remain open.
When a candidate says I am for small business, you need to ask: What are you going to do to reduce the barriers to small business growth and what are you going to do about state policies that now put small business at a competitive disadvantage?