Washington Can Help New Small Businesses Thrive
Since the pandemic, millions of Americans have become entrepreneurs. Last week at Fox Business, Chamber Vice President for Small Business Policy Tom Sullivan explained how Washington can support these new small business owners.
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Why it matters: “As new businesses grow, they are likely to employ more people in the community and fuel the local economy,” Sullivan wrote. About one-third of them are likely to hire workers.
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Details: ”Since August 2020, applications filed to start new businesses have averaged around 400,000 per month,” Sullivan noted. “Prior to the pandemic, they hovered around 300,000 per month.”
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What Washington should do: Sullivan laid out six things Washington can do to support America’s small businesses:
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1. Don’t penalize entrepreneurs. Avoid “laws like California’s AB 5 and similar proposals at the federal level that force sole proprietors into an employee relationship.”
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2. Prevent punitive tax increases. “Without congressional action in three years, small businesses will face a massive tax hike.”
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3. Avoid new mandates. They “raise the cost of entry so high that small businesses can never break into the federal contracting arena.”
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4. Stop the Federal Trade Commission from making “it harder for small business owners to eventually partner with or sell to a larger business.”
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5. Protect businesses’ freedom. Let them “set their own prices and enter into contracts by opposing government price controls and new regulations governing private business contracts.”
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6. Expand free trade opportunities. They provide “up more opportunities for small businesses to sell to the 95% of the world's consumers who live outside the United States."
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Bottom line: Let’s do what we can to support this entrepreneurship boom that reflects the dynamism of the U.S. economy and benefits local communities.
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Dig deeper:
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The Small Business Bill of Rights summarizes what should be the basic rights of business owners in America – and represents policies the Chamber fights for every day.
What's Happening with Interest Rates?
by: Curtis Dubay, Chief Economist, U.S. Chamber
The Federal Reserve raised its key interest rate again earlier this month. That was the eighth time it has done so in the last year, and a few more small hikes are likely coming with inflation still high and consumer spending and the job market still hot.
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Why it matters: The Fed’s actions have translated into higher interest rates for consumers and businesses, but the increases in rates have tailed off.
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- For example, the average rate on a 30-year fixed mortgage peaked at over 7% in November. It has since stabilized at around 6.3%.
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- On the business side, the average rate for a AAA-rated corporate bond peaked at around 5.4% in October and has since settled at around 4.6%.
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Big picture: The slight drop in rates from late 2022 and their stabilization since indicates that the markets originally overestimated how much the Fed would raise rates. The markets now believe the Fed won’t raise rates much more than it has.
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- This is good news for the housing market because, if it holds, it means the damage of higher mortgage rates is already in the rearview mirror.
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- For businesses, it means borrowing costs are likely to remain where they are. That will allow for better planning and an increase in long-term investing.
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