Opinion: Don't overlook small businesses' election perspective
With only one week left to go until the midterm elections, the political perspective of one demographic seems to be missing from the national conversation.
While farmers, manufacturers and suburbanites have been frequently polled by the mainstream media, small business owners and their employees have been largely ignored.
That's a shame. Small businesses play a big role in the U.S. economy, accounting for about two-thirds of new job creation. And small businesses are a potent political voice. In Michigan, there are about 900,000 small businesses, and nationwide there are about 30 million.
I'm not sure how small business owners are voting, but I am positive that small businesses have been among the biggest beneficiaries of the pro-growth federal policies enacted by the Republican majority in Congress.
Exhibit A is the new 20 percent small business tax deduction that took effect this year. This tax cut allows small businesses to protect one-fifth of their earnings to reinvest back into their businesses in the form of higher wages, expansion, and new job opportunities. This tax cut has effectively lowered the top marginal federal tax rate on small businesses from 40 percent to 30 percent.
Small businesses, such as my family’s wine distribution company, Hye Quality Wines, and thousands of others across Michigan, have benefited from this tax reform, collectively adding thousands of jobs to the Michigan economy and increasing wages for their employees.
For instance, Blackrocks Brewery in Marquette is using its tax cut savings to hire more employees and invest in new equipment. Renaissance Global Logistics in Detroit has given its employees bonuses. And WebHobby Shop in Pontiac is giving its employees raises. Multiply similar actions across the country and it’s easy to understand why the unemployment rate is at a 49 year low, wages are growing at their fastest pace in a decade, and annual economic growth is on track to exceed 3 percent for the first time since 2005.
Yet good public policy only lasts so long as voters know about it. While big business and big labor often have lobbyists and a high-priced megaphone to voice their policy objectives, small businesses are too busy and operate on too slim of profit margins to engage in the politicking necessary to achieve public policy victories.
That’s why I’d urge proponents of small businesses to vote in this year's election to protect the tax cuts that are doing so much good for small businesses. National Democrats have promised to repeal the tax cuts if they retake Congress on Election Day, and have already introduced legislation to do just that. This means sending the representatives responsible for this success back to Washington.
A repeal of tax cuts would cause a massive extraction of wealth from our communities and Main Streets by Washington, D.C. According to data from the Tax Foundation, this would cost Michigan 6,400 full-time jobs, and the average family about $2,000 a year. It would be a shot across the bow of the small business-driven economic growth we've recently enjoyed.
Small business optimism is at a record high, and small business creation is finally booming again. This is benefiting employees, Main Streets, and communities across the state and country as much as it is benefiting small business owners themselves.
I urge you to keep small businesses in mind when you cast your vote on Election Day.
Mike Banerian is the vice president of Hye Quality Wines in Bloomfield Hills.