- The Washington Times - Sunday, August 29, 2004

President Bush has made great efforts to identify with America’s small-business owners. Unfortunately, these efforts may be for naught unless the Senate takes action on some important legislation.

Mr. Bush has championed small-business issues since his days as governor of Texas. He blocked sweeping ergonomics regulations issued in the final days of the Clinton era, lifting an enormous burden from the backs of small-business owners, and championed increased expensing to make it easier for small firms to buy equipment. In his 2004 State of the Union address he also called for permanent repeal of the death tax.

However, the lack of attention to a key constituency by some Republicans in the Senate leaves many of the party faithful scratching their heads. Have these senators forgotten their campaign promises to America’s entrepreneurs?

Many senators elected in 2002 campaigned on the promise of small-business fairness, including permanent repeal of the death tax. All of them said nice things about helping small businesses obtain affordable health insurance. Most seemed to understand that a mandatory minimum wage goes against the grain of a competitive marketplace. Yet, today, those same senators and many of their brethren are oddly silent, as others continue to play politics with the livelihoods of families across the nation.

Consider the matter of the death tax, the number one issue facing many small-business owners. The tax-relief legislation of 2001 gradually reduces rates and increases the exemption until it is repealed in 2010. But the death tax returns at the full 55 percent tax rate in 2011. The owner of a family business still cannot plan effectively to ensure that future generations — faced with staggering death taxes — could afford to carry on the business.

The Policy and Taxation Group says that more than 70 percent of family businesses do not survive the second generation, and 87 percent do not make it to the third generation. To avoid those consequences, a small-business owner must spend hundreds of thousands of dollars in estate planning — money that could be used to create jobs and expand the business.

According to a recent bipartisan survey conducted by the Tarrance Group, 57 percent of likely voters would be more likely to support their senator if that senator voted to kill the death tax. By a two-to-one margin, these same voters said they would be less likely to vote for their senator if he or she did nothing on this issue.

The House has repeatedly passed permanent death-tax-repeal legislation. But leaders in the Senate can’t even manage to bring it to a vote, ignoring the Republican commitment to small business in this election year. Instead of moving swiftly to get death-tax legislation to the president for his signature, entrepreneurs hear empty excuses.

Meanwhile, it has been reported that Democratic presidential candidate John Kerry would offer more relief from the death tax than many Senate Republicans. According to news reports, Mr. Kerry supports a $10 million exemption to help most small-business owners avoid the tax altogether.

Senators, unfortunately, have been busy with other matters, such as passing a $170 billion tax bill that showers U.S. corporations with billions in new tax breaks. The 980-page bill includes tax breaks for foreign dog-race gamblers, certain car dealers, bow-and-arrow makers, operators of cruise ships and NASCAR track owners, to name a few. It even includes $14 billion in tax incentives for energy production, which has been called a “shameless scam.” Meanwhile, some senators from both sides of the aisle are hard at work on legislation to increase the minimum wage — despite small-business opposition.

For years, small-business owners have identified closely with the GOP. But the lack of action by senators thought to be friends of small business is causing many individuals and groups to look elsewhere. The Hill newspaper reports that Senate Democrats are raising significant amounts of money from Republican-leaning business groups. And recent polls indicate traditional support may be slipping. Mr. Bush and his congressional affairs team should demand the Senate act on the death tax before it’s too late.

This fall, small-business owners will go to the polls to make their voices heard. Republican senators must take action now to keep the majority and help a president who needs maximum enthusiasm and turnout from America’s entrepreneurs this November.

David K. Rehr is president of the National Beer Wholesalers Association.

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