This is Part 3 of our series on campaign words. Many words and short phrases are used in campaigns, and sometimes those phrases cause voters to think one thing when the words actually mean something else—or nothing at all.
This time we look at the words, “I support small business.” Those are words every small business owner longs to hear. We like to hear them too. Conduit was formed in large part because small business is often forgotten at the State Capitol, and because small business has often been overlooked by the state Chamber of Commerce, as it favors the interests of big corporations.
Unfortunately, many politicians who say, “I support small business,” deliver only good thoughts and nothing else.
So 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 that are, in part, paid for by taxes on small businesses?
- 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 getting into business?
Competing against taxpayer-assisted corporations. Too often, big corporations get the breaks while small businesses are left to pay for the benefits given to big corporations. Supposedly, tax breaks and grants (giveaways) help large corporations grow, attract more people to an area, and then small businesses will benefit from increased activity nearby. Yet the reality is that many small businesses find themselves on an unlevel playing field, forced to compete for customers and employees against large corporations that enjoy state-assisted tax breaks and grants.
Will the candidate do anything to curb faulty economic development giveaways to big corporations so the tax burden on small businesses can be reduced and the competitive advantage of taxpayer-assisted corporations can be addressed?
Government red tape and delays. We all deal with government red tape, even for something as simple as registering a vehicle. But many people would be surprised by how many different state agencies are involved, how many regulations exist, and how many permits are required just to break ground on a new business, even for 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 will he do?
Over-licensure of occupations. Arkansas requires more occupational licenses than most states, creating barriers to starting a new occupation or opening a new business. A legislative committee focused on over-licensure, but that effort fizzled in 2021, with fewer than a handful of licenses addressed and one bill being hijacked to create another government program. (See: Curbing Occupational Licensing: Will It Succeed? and Curbing Occupational Licensing – Status Report)
Is addressing over-licensure simply 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 point out that, at times, claims of helping small business have been used as nothing more than an excuse to take more money out of taxpayers’ pockets—without helping small business at all. In 2019, politicians claimed they were helping mom-and-pop and brick-and-mortar stores by passing the internet sales tax to make “out-of-state” stores pay sales tax. Supposedly, this would level the playing field and encourage people to buy locally.
Of course, it was all hogwash. First, Arkansas consumers—not out-of-state businesses—pay the internet sales tax, which takes more money out of consumers’ pockets. Second, consumers were not buying from out-of-state businesses to save a few dollars in taxes; they were buying because of convenience and availability. Third, online sales have continued to skyrocket.
Whether one is “for” or “against” the internet sales tax is not the point. The point is that small businesses received no benefit from the tax. The real goal was to use small business as cover to sell the bill so the state could access another pot of taxpayer money.
One more thing: when Governor Asa Hutchinson shut down businesses during the first months of COVID-19, it was small businesses that took the hit, while big-box stores were allowed to remain open.
When a candidate says, “I support small business,” voters should ask: What are you going to do to reduce barriers to small business growth, and what are you going to do about state policies that put small businesses at a competitive disadvantage?
