Small businesses create about two-thirds of all jobs in the U.S. and employ more than half of the nation's private-sector workforce, according to the Small Business Administration. Given their immense role in the American economy, entrepreneurs' public policy concerns are of particular importance to elected officials.
As the 2016 presidential and congressional elections draw near, Business News Daily took a look at small business owners' top priorities as these entrepreneurs prepare to mark the ballot on Nov. 8.
Extensive research and polling regarding small business owners' perspectives on the election reveals a few recurring themes. Whether Donald J. Trump or Hillary Rodham Clinton wins the White House — or a third-party, dark-horse candidate takes the election by surprise — no single administration on its own could thoroughly address the issues entrepreneurs hold dear; the outcome of the congressional elections will also play a key role in exactly how any policy is crafted.
In an election cycle in which less than 30 percent of Americans believe the campaigns have adequately focused on the things most important to them, the following issues remain at the forefront of small business owners' minds. Whatever the makeup of the American government come January 2017, elected officials will have to pay attention to these priorities within the entrepreneurial community.
Taxation remains a high-priority issue for entrepreneurs everywhere. In a Gallup survey conducted earlier this year, 83 percent of responding business owners said policy governing the tax code, regulations and tax rates for small business was "extremely" or "very" important. Further, an Invoice2go survey of 500 business owners found that 43 percent of respondents listed "small business taxes" as their No. 1 issue.
Marc Joseph Hetherington, a professor of political science at Vanderbilt University in Tennessee, told Business News Daily that out of the top three issues on business owners' minds, tax policy was the most likely to undergo changes regardless of the election's outcome.
"Tax policy tends to be something that ultimately allows for more in the way of compromise," Hetherington said. "There are more and different levers available to policymakers. … This is where some horse trading can take place. Certain tax policies might be enacted in exchange for certain benefit changes."
Exactly how taxation and spending plans might change depends on both the future administration and the makeup of Congress. And of course, federal tax policy is just one piece of the overall tax burden, as state and local taxes also play a role.
Once again, political advisor James Carville's famous adage, "It's the economy, stupid," rings true. Business owners are highly concerned with the state of the economy. In the Gallup poll, 77 percent of entrepreneurs said government action related to the economy was either "extremely" or "very" important to them. Although the U.S. economy has officially been in recovery from the so-called "Great Recession" since June 2009 — when the national gross domestic product began to trend upward again — growth has been sluggish by historic standards.
"I think the very most interesting thing, at least these days, about the economy is just how open to interpretation it seems to be," Hetherington said. "Nothing matters more than one's partisanship. There's an objective answer to [whether the economy has improved, gotten worse or stayed the same,] and yet the difference in Republican and Democratic assessments of that question are on the order of 40 percentage points."
Hetherington added that this type of partisan divide is unprecedented in American history, stating "we've never seen anything like it before."
Health care policy has long been a big-ticket issue for business owners, particularly since President Barack Obama signed the Affordable Care Act in 2010. Gallup's survey results indicate that 73 percent of responding entrepreneurs listed health care as either "extremely" or "very" important to their businesses. Another survey of 2,500 small business owners, conducted by Manta, found health care to be the second most important issue on the minds of entrepreneurs, trailing economic policy. Currently, businesses with 50 or more full-time employees are required to provide health care for their workers under federal law, or face a penalty.
"The bottom line is that the norms of governance have changed so fundamentally over the last eight years [that] I think it's very unlikely that we'll see any major changes here," Hetherington said. "The system is so gridlocked that a victory for one side is a defeat for the other, and so we're not capable of" making significant changes.
Voter apathy and dissatisfaction
This year's presidential election features the two most unpopular major-party candidates since at least 1980. That fact is underlined by the results of the Manta survey, in which 28.9 percent of respondents said they were undecided about their votes. When restricted to just the two major-party candidates, that number rose to more than a third of the respondents.
"This is an election unprecedented in how much people dislike both candidates," Hetherington said. "No election has ever been this way. The big question is whether hate is more powerful than love, and my sense is yes, in politics that is the case."
The Pew Research Center compiled data that seems to support Hetherington's suggestion that hate trumps love in American politics. Pew found that for both Trump and Clinton, more of their supporters were voting against the opposing candidate rather than for the candidate who will get their votes.
Small business outlook
As business owners grapple with difficult political and economic climates, they are preparing to grow their companies through the final quarter of 2016 and into 2017. According to a survey published by small business lender Bizfi, 88 percent of small business owners intend to invest more in their companies than they did last year. A vast majority (83 percent) will purchase equipment, and 63 percent plan to increase the size of their staff, they said.
Stephen Sheinbaum, founder of Bizfi, said the survey results demonstrate that business owners are finally regaining confidence since the financial crisis, which led many to "survival mode." The hesitation to invest more and borrow, though, seems to be waning, he said.
"The years of small business owners needing every penny earned to just cover the basics — rent, payroll, inventory — are behind us," Sheinbaum said. "Too many small business owners and their customers seemed to be anticipating another disaster, and it caused them to hold back on investing and spending. Now, they are signaling that they intend to spend again, but in a measured way, and that's very good news."
Whether the results of the election change entrepreneurs' calculus heading into 2017 remains to be seen. What is certain, though, is that small business owners across the entire nation, of all political stripes, will be watching this election closely to determine what it means for their livelihoods.