Main Street is speaking

OPINION:

Washington often claims to speak for small businesses, but how often does it really listen?

That is the purpose of Advancing American Freedom’s new Small Business Opportunity Initiative: to ensure that the voice of Main Street is heard clearly by those who govern.

Our first national survey of small-business owners offers a compelling message that lawmakers should heed.

First, the good news: Mom-and-pop shop entrepreneurs are overwhelmingly optimistic about the future of their businesses and our country, thanks to the extension of the 2017 tax cuts lawmakers enacted last year.

Sixty percent say the continuation of those tax cuts will help their business, including 17% who say it will help “a lot.”

Small businesses operate on tight margins, and even modest changes in tax policy can alter behavior dramatically. When Washington lowers the tax burden, owners hire, invest and expand. When it raises taxes, they pull back.

Our polling confirms this basic truth: Fifty-eight percent say that allowing the tax cuts to expire would have hurt their company’s bottom line.

It’s no surprise, then, that tax relief ranks as the No. 1 policy priority for small-business owners.

For conservatives, the lesson is straightforward. The pro-growth, pro-investment agenda that has always defined the conservative movement makes for good policy and good politics because it is grounded in the experience of the very people who power the American economy.

Our polling also contains two warnings that Washington ignores at its peril. The first is tariffs.

More than half of small-business owners report that the Trump administration’s tariffs and trade policies are squeezing their businesses, driving up costs significantly and freezing plans to raise wages or create new jobs. Main Street business owners view tariffs as the most negative economic policy embraced by this administration.

Tariff reduction or repeal ranks as the second-highest policy priority among small-business owners, just behind tax relief.

The second area of concern is inflation. Nearly 8 in 10 small-business owners report that their supply costs have increased over the past year, and they are responding in predictable ways. Forty-two percent are scrambling to find cheaper suppliers, and 40% are raising the prices customers pay at the register.

In other words, inflation is a chain reaction rippling through the economy, eroding prosperity, stunting growth and ultimately punishing American families.

Taken together, tariffs and inflation form a vice, clamping down harder and harder on small businesses from both sides. Both demand a swift response from policymakers in Washington.

Despite these pressures, the most striking finding in our survey is the resilience of the American small-business owner.

Eighty-eight percent say their business is doing well today. Forty-five percent expect conditions to improve over the next year, and just 20% expect them to worsen.

Consumer demand is rising for many, and optimism remains strong. Small-business owners understand that the problems they face can be fixed — if their leaders have the courage to act.

That resilience is the great, often underappreciated strength of the American economy. Still, resilience should not be mistaken for immunity. Although the government cannot manufacture the dynamism of Main Street, it certainly can suffocate it.

Our polling suggests the path forward is not complicated: Cut taxes to promote growth, immediately reduce unnecessary trade barriers that function as hidden taxes on small businesses and get inflation under control by restoring fiscal discipline and regulatory restraint.

Above all, listen to the entrepreneurs who sign the paychecks, take the risks and keep our communities alive.

Main Street is speaking clearly. Washington should listen.

• Tim Chapman is president of Advancing American Freedom Foundation. Jonathan Moy is the major gifts officer at Advancing American Freedom Foundation.