- The Washington Times - Monday, October 8, 2001

President Bush recently spoke of his great faith in the nation's economy and the people that make it happen. He recognized the resiliency and energy of America's business people small business owners, entrepreneurs, farmers and ranchers the bedrock of our economy. The president was confident that businesses will "rise to the challenge," but he also noted that they'll need some help, too.

Small business owners and entrepreneurs do need help, but not in the form of a bail out from Washington. Practical tax-relief measures will do. Ones that help fuel economic recovery, and soften the blow that many small businesses are feeling in their bottom-line, and ultimately return our nation to robust growth.

To do this, Congress must consider expediting and making permanent the Bush tax plan it passed earlier this year. Official Beltway insiders say the idea is "dead," but for the sake of small businesses it must be reconsidered. All of the plan's core elements marginal rate reduction, death tax repeal and IRA expansion are decisively pro-growth. The phase-in package offers greater value to the economy and small businesses if promptly compressed. It offers greater certainty to business owners and taxpayers if made permanent, and pronto.

From both an equity standpoint and a purely practical one, acceleration and permanency make sense. For example, it's only fair that currently productive family owned businesses and the millions of people they employ, are kept whole during this challenging economic period at the same time the taxpayer surplus is being redistributed to business sectors on the brink of extinction. If our economic goals are stability, growth and survival, permanent repeal of the death tax fits the bill. (Note to Congress and Mr. Bush: Raising the minimum wage does not.)

Cutting the capital gains tax in half is a clean step that will broadly impact what ails the economy on many levels. Even though it got lumped into the pile of "divisive" issues, reducing yes even eliminating this pernicious tax on risk-taking and investment has bipartisan support. Robert Rubin may be against cutting it, and maybe it's not on Alan Greenspan's priority list, but Congress and Bill Clinton somehow did it back in 1997, which kept the economy in spectacular shape.

Reducing the cost of capital, making capital more abundant and mobile, while raising the value of equities, are all urgently needed. The fear that cutting capital gains will lead to massive stock selling is rather bogus. Gains to the economy and the market would far outweigh any short-term/marginal losses of stock selling. By unleashing capital, it will move to its most productive need a positive and desired goal of "unlocking" resources. Entrepreneurs would have greater availability to capital, which means our nation's innovators and risk-takers can continue to produce innovations and services that helped power our economy over the past eight years. As growth returns or simply a signal that policies are being put into place to cultivate growth so will the uptick in the markets.

Of course, there is no reason for the United States to curl up in a ball and become inward-oriented in our economic policy-planning during this period where U.S. world leadership is crucial. Mr. Bush needs Trade Promotion Authority (TPA) so America can continue to sell not only our products and services abroad, but our principles too. Two-thirds of the firms participating in the export economy actually have less than 20 employees with small business exporters numbering 202,185. It's precisely at times like these that more of the world needs to be our customer base.

Finally, affordable and reliable energy is essential not only to small business, but the entire economy. Price spikes, like those we had last year, could be the final blow for many small firms already threatened by the current economic squeeze. Increasing domestic production, while clearing the regulatory maze that has thwarted the modernization of our nation's delivery infrastructure have become increasingly important in light of the attacks. That is why comprehensive energy legislation, minus the misguided proposals to raise CAFE standards, or mandate the level of standby power in consumer electronic goods, is certainly a worthwhile effort that will not only bolster the health of the economy, but address national security issues as well.

A range of other sound ideas have been floated to kick-start the economy from increased business expensing to alternative minimum tax repeal. Majority Leader Dick Armey presented clear principles this week to help guide his colleagues in developing an economic growth package. He urged them to focus on pro-growth policies, to discount the notion that government spending will meaningfully help the economy, and advance policies that serve the twin goals of boosting the economy in the short-term while making it stronger for the long term (can the "temporary" tax incentive idea). Finally, the changes would be made retroactive to Sept. 11.

These are sound principles, and ones that can lead the Congress to develop a economic recovery package that will truly help America's small business owners and entrepreneurs demonstrate their resiliency and ingenuity. The economy certainly needs that to happen, and now more than ever.

Karen Kerrigan is chairman and founder of the Small Business Survival Committee.

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