November 30 2010
Women's Wish List to Uncle Sam
This Thanksgiving, women had much to be thankful for. Here's one blessing that likely wasn't mentioned around many dining room tables, but that was important nonetheless: The Paycheck Fairness Act failed to pass the Senate and therefore won't become law during this Congress. Women should give thanks. If that legislation had passed, it would have increased regulatory and liability burdens for employers, making it harder for businesses to maintain and create jobs and would have particularly disadvantaged women.
Now that Thanksgiving has passed, many women are setting their sights on the next big holiday. Undoubtedly, most will be focused on preparing the families' festivities and buying what they can from the kids' wish lists. But certainly some women are creating wish lists of their own.
Women may dreaming of gifts like jewelry or a nice new sweater, but they should prepare a different, far more important, list for Uncle Sam. The following are some recommendations for what women should be asking from their representatives in Washington this holiday season and in the new year.
A permanent extension of the current tax rates. Women start businesses at twice the rate of men. And it's no secret that many small businesses file their taxes through the individual income tax code. An extension of the Bush tax cuts would benefit business owners (men and women alike) by allowing them to use more resources for growth, hiring and investment. Even under Obama's plan to sunset the cuts only for the top two brackets, a majority of small business profits would still face a tax hike. This would be bad news, not just for business owners, but for everyone employed by a small business. An extension of the tax cuts is a policy change that Congress should deliver before Santa arrives.
Abolish the death tax. Female entrepreneurs tend to be more risk-averse than their male counterparts. This means that they rely less on loans and investors, and more on personal or family savings, which would take a hit if the death tax is resurrected in 2011. Keeping the death tax in its grave would allow more women access to inherited resources that could be used as capital investment.
Repeal the 1099 provision of ObamaCare (and then work to repeal the entire law). There's been a heated debate about whether the health reform of March 2010 will help or hurt women. There should be no debate, however, about the impact that ObamaCare will have on women business owners. Women-owned businesses tend to be small in size, which means they already face an administrative disadvantage when handling tax paperwork burdens. ObamaCare greatly increases this burden with its onerous 1099 provision.
There are other reasons to repeal the new law in its entirety. The tax credit to small businesses effectively discourages hiring and wage raises by rewarding smaller, lower-paying firms with bigger credits. Small business owners are also preparing for major increases in health care costs as a result of this new law. The best strategy on health reform policy for women-owned business would be a total repeal of ObamaCare, but if that's too much to ask for in the short run, policymakers should at least rethink the 1099 requirement.
Improve the regulatory environment in states and localities. This fall, the Institute for Justice published a series of eight city studies on government barriers to entrepreneurship which listed a variety of regulations that prevent entrepreneurs from establishing or growing their businesses.
In the District of Columbia, for example, Robin, who is operating a personal-services business, is reluctant to advertise her services because of an outdated zoning record that shows her site as residential, although the building has been used for commercial purposes over many years. Getting the zoning records changed would cost thousands of dollars and take several months, or even years, leaving Robin to operate in the shadow of the law. Shadow entrepreneurs, like Robin, invest fewer resources in their businesses, in the constant worry that the government might show up any day to confiscate their business investments as a consequence of breaking the law. Lawmakers at every level of government should take a hard look at the laws and regulations that are in place and seek to eliminate those that cause unnecessary burdens for businesses and barriers to entrepreneurship and business expansion. After all, the best gift a representative can give is the gift of self-sufficiency.
Women have many responsibilities as we head into the holidays, but they should remember to keep an eye on Congress because the decisions made in Washington can be gifts-or burdens-that last for years.