National politics are so polarized anymore that it’s hard to know where candidates running for office really stand on issues of importance to all of us. What they say gets analyzed ad infinitum, and the meaning of their words literally gets lost in the translation.
Critics from the conservative right scream, “The Washington Post is too liberal.” Supporters of the liberal left yell back, “Fox News is too conservative.”
It simply is not that cut and dried, or shouldn’t be.
In an effort to keep you informed in this presidential election year, Modern Tire Dealer asked the two main candidates what they think of small business issues that are important to retail and commercial tire dealers. They range from tax relief to rising insurance costs. And we didn’t forget to try and elicit comments on the “Right to Repair Act.”
Both President George W. Bush and Senator John Kerry were asked to answer the same questions in a month’s time leading up to our October issue deadline. The answers from both follow. They are reprinted as they were sent to us. President Bush did not respond to the question on the “Right to Repair Act.”
Senator Kerry’s responses are listed first only because his handlers returned the answers sooner than President Bush’s camp did.
We believe this will give you an unbiased look at party platforms and help you size up the Republican and Democratic candidates running for the most important office in the world –- the United States presidency.
MTD: Do you plan any tax relief for small businesses?
Kerry: I absolutely support tax relief for small businesses. There are two things everyone should know about my tax plan: First, under my plan 98% of individuals will pay lower taxes than they do under current law and I have proposed cutting the corporate tax rate by 5% -– providing a tax cut for 99% of taxpaying companies small and large. Second, my plan provides additional tax cuts for small businesses that create jobs and to help small business provide health insurance for low- and moderate-income workers. I will provide small business owners with a New Jobs Tax Credit that refunds payroll taxes for new jobs and a health care tax credit for employers who provide health care to their workers. I will also immediately raise the estate tax exemption for small business owners to ensure that they can pass on $10 million in business assets tax free -- which is more generous than the estate tax now. And I am committed to reducing the tax paperwork burden.
Bush: I know that small businesses are vital to our nation’s prosperity and are responsible for creating more than 70% of new jobs. I have acted to help small businesses and the people they employ by reducing taxes, encouraging investment, and removing obstacles to growth.
Because we passed the most sweeping tax relief package in a generation, more money is in the hands of small business owners who are investing it in new equipment and new workers. By quadrupling to $100,000 the amount that small businesses can expense on things like computers and machinery, and by sending the death tax on its way to extinction, entrepreneurs can invest more in ways that benefit their employees and strengthen the economy. And because 90% of small businesses pay taxes at individual rates, the across-the-board income tax cuts have extended relief to 25 million small business owners and entrepreneurs. If Congress fails to act and make this relief permanent, many of those small business owners will see their taxes increase.
[PAGEBREAK]
MTD: Are you a supporter of the Motor Vehicle Owners Right to Repair Act (H.R. 2735 and S. 2138)? The “Right to Repair” act is designed to protect dealers -- and other repair shops in the automotive aftermarket –- by guaranteeing them the information necessary to repair today´s highly complex vehicles.
Kerry: I believe that the auto repair marketplace needs to be as competitive as possible so that consumers have options. Clearly, car owners, independent mechanics, and tire dealers should have access to basic vehicle information for repair purposes. Auto manufacturers also need to know that sensitive trade and patent information is protected. I look forward to having a debate on this legislation and I will support efforts to maintain a competitive marketplace.
MTD: According to the Small Business Administration (SBA), there were at least 534,800 closures vs. 572,900 start-ups (both about 10% of the total number of small businesses) in 2003. The SBA’s most recent data credits small businesses with creating “all of the net new jobs in the U.S.” What plans do you have to promote the growth of small business?
Kerry: Small businesses are the engine of the American economy. Today, small businesses are struggling in a business environment weakened by economic stewardship that puts big business ahead of the small American entrepreneur. Loans are down and access to capital has decreased while health care and energy costs have increased -- and are still climbing today.
As the former owner of a cookie and muffin shop called Kilvert and Forbes, I have first-hand experience with the obstacles faced by small business owners. As president, I will bring to the White House both the lessons I learned from owning and working in a small business and from fighting to support small businesses in the Senate.
I understand that small businesses have special needs and special difficulties when accessing capital. I will create a “Small Business Opportunity Fund” to help provide additional microloans, loans, and venture capital to entrepreneurs. Investing in small business is good bang for the buck. An additional $170 million investment could help make billions in long-term capital and equity available for small businesses.
To ensure that the concerns of small business owners are heard in a Kerry administration, I will put the SBA Administrator at cabinet level, give small businesses a voice at the World Trade Organization and evaluate other government entities to see how they are addressing the concerns of small businesses. I will also increase the share of federal contracts for small businesses.
I will cut health care costs for small businesses by two-thirds. I will propose refundable tax credits for up to 50% of the cost of coverage to small businesses and their employees. And I will give small businesses access to the Congressional Health Plan to save them approximately 15% in health care costs on top of the tax credit.
In order to help small business owners reduce their utility bills, I will provide a credit to purchase equipment that meets energy-efficiency standards for heating and cooling in new buildings and to retrofit existing ones. I will also provide a 20% tax credit for the purchase of energy efficient building equipment.
As detailed above I will take a number of steps to provide tax relief to small businesses including a 5% cut in the corporate tax rate and the creation of a New Jobs Tax Credit to cover an employer´s share of payroll expenses for net new jobs created by small businesses in 2005 and 2006. I will also eliminate capital gains taxes for long-term investments in small businesses.
To see my full plan to create a new era of opportunity for America’s small business owners, please visit: http://www.johnkerry.com/issues/economy/small_biz.html.
[PAGEBREAK]
Bush: The government’s role is to create an economic environment that encourages work, investment, and entrepreneurship. America has made great progress during the last four years. We have overcome terrorist attacks, corporate scandals, and an inherited recession. Today our economy is enjoying robust growth. We have created more than 1.7 million new jobs since last August, and the unemployment rate (5.4%) is lower than the average rates during the 1970s, 1980s, and 1990s.
Our economy is growing stronger and so is America’s small business community. We passed tax relief which left more money in the hands of small business owners who are investing it in new equipment and new workers. I have also worked to reduce bureaucratic regulations and to streamline policies so that small businesses can focus their resources on job creation instead of on excessive paperwork. For example, under my administration the Treasury Department finalized rules allowing more small businesses to use the cash method of accounting, which was a tremendous simplification. I have directed the Treasury Department to study other ways to simplify taxes on small businesses, and I’ve instructed the Director of the Office of Management and Budget (OMB) to seek the views and comments of small businesses on existing federal government regulations, paperwork requirements, and guidance documents.
Through its flagship 7(a) lending program, the Small Business Administration (SBA) is providing $12.5 billion in federal loans for small businesses to acquire the funding needed to start up new firms. I have proposed to put the program on a more sound and stable financial footing, not subject to the frequent deceptions and shutdowns of the past.
My administration awarded more federal contracts to small businesses in 2003 than ever before. The government invested $65.5 billion in small business contracting -- 23.6% of all federal contracts in 2003. This achievement not only exceeded the statutory goal for small business contracting, but set an all-time record for contract awards given to small businesses.
We have a responsibility to make sure that oversight does not become oppressive. I have asked the director of OMB to work with the Small Business Administration’s Office of Advocacy to strengthen the enforcement of the Regulatory Flexibility Act. This act requires agencies to prepare an analysis of the impact of new regulations on small businesses before they are put in place. OMB will send back to agencies any proposed rules that have not been given serious consideration as to the impact those rules would have on small businesses.
This is good progress, yet we can do more. We must reduce the number of frivolous and junk lawsuits that divert resources from job creation to litigation. We must remain committed to open trade. Open markets abroad mean more potential buyers for American goods and services, and more jobs at home. Because American workers are so productive, we can compete with anyone in the world, as long as trade is free and the rules are fair. Small businesses depend on affordable and reliable energy supplies; and energy shortages, price spikes, and blackouts disrupt the economy and make it difficult for small businesses. I proposed a National Energy Policy to reduce our reliance on foreign energy, protect the environment and promote conservation, and create innovative energy technologies for the future. Now Congress must act on my proposals.
The burden on small businesses of excessive health care costs hurts their opportunities to expand, purchase new equipment, and hire new workers. To reduce the burden of health care costs on small business owners and employees, I have proposed the creation of Association Health Plans, so small businesses can pool together to negotiate lower health care costs and provide health insurance to their employees. The Medicare Modernization Act I signed in December created health savings accounts, which combine flexible, affordable insurance options for small businesses and individuals, with the opportunity to save money for out-of-pocket medical costs in a tax-free account.
These combined efforts are encouraging nationwide growth of small businesses, and creating an environment ripe for job growth and entrepreneurship.
[PAGEBREAK]
MTD: Escalating health -- and liability -- insurance costs are greatly impacting the ability of our dealers to turn a profit. Some of them have had 50% increases in insurance costs over the last few years. And, unlike in other industries, tire dealers are having a hard time passing the costs onto the consumer. Partial relief may be on the way: The U.S. House of Representatives already has approved the Small Business Health Fairness Act (S. 545), which would allow small businesses to purchase affordable health care coverage through a trade association. How does your campaign platform address rising insurance costs?
Kerry: As all of you know, small businesses are at a disadvantage because of the soaring costs of health care. You can’t bargain for better rates the way big companies can. And when you do the right thing and provide coverage, you have to ask your employees to pay more or have to offer a less than generous plan.
My health care plan will address the underlying challenges that small businesses face. I will allow small businesses to buy into the same health plan as members of Congress, so that they can diversify their risks, get better prices and reduce their administrative costs.
My plan will also give small businesses tax credits of up to 50% to help them provide coverage for their low- and moderate-income employees.
Finally, I will make health care more affordable for employers and employees by having the federal government help out with certain high cost health cases. This system will help small businesses diversify the costs of catastrophic medical cases and result in savings of up to $1,000 annually for a family policy.
Bush: I believe that every American should have access to affordable health care. We need to address rising health care costs and make sure that small businesses can help working families get high-quality, affordable health care when they need it. My administration has implemented a comprehensive approach to meeting this need, and we will continue to pursue these efforts over the next four years. I signed into law new Health Savings Accounts (HSAs) so that Americans can have more control over their health care by paying for routine medical expenses and saving for future medical expenses in a tax-free account that they own and can take with them when they change jobs. During my second term, I will propose for small business owners to get a tax credit on contributions they make to their employees´ HSAs. The credit would apply to the first $500 per worker with family coverage and the first $200 per worker with individual coverage, self-employed people will be able to claim this credit for contributions to their own accounts. I will also propose a tax credit for low-income families and individuals - families will receive up to $2,000 for their premiums and $1,000 cash to help meet the costs of the deductible, and individuals will be eligible for up to $700 for premiums and $300 for their HSAs.
I have also asked Congress to enact Association Health Plans (AHP) to give more American working families and small businesses affordable health care. These plans will allow small businesses to band together and negotiate on behalf of their workers just like large corporations and unions do. I want to expand the AHP concept so that charitable organizations, churches or other civic groups can also negotiate coverage for their members.
Through my expansion of community health centers more than 13 million people are able to see doctors or nurses regardless of their ability to pay -- three million more patients than in 2001. In a second term, I will ensure that a health center is located in each of our nation’s poorest communities.
We will continue to push for medical liability reform that will reduce frivolous lawsuits that drive up costs and drive good doctors out of medicine. And by streamlining care and promoting the greater use of information technology, we will improve quality, minimize mistakes, and eliminate waste. These combined efforts are controlling costs for families and small businesses, eliminating barriers to affordable care, and putting health care control back into the hands of patients and doctors.
[PAGEBREAK]
MTD: Do you support NAFTA (North American Free Trade Agreement) as it stands now?
Kerry: President Clinton was trying to move us in the right direction on job creation and including labor and environmental standards in trade agreements. We have learned that we should go further on labor and environment standards. John Edwards and I will ensure that strong and enforceable labor and environmental standards are included in the core of all future trade agreements, like they were in the Jordan Free Trade Agreement.
And we will ensure that NAFTA and future agreements do not allow investment rules to undermine environmental standards either here or in our trading partners.
The next president has to have a strategy not only to make progress on opening global markets but also on showing Americans that we care about their jobs, that we will fight for a level playing field, and that we will not turn our backs on American values in the process. The Bush administration has never taken the task of enforcing our existing trade laws seriously. John Edwards and I will stick up for American interests by enforcing our existing trade agreements and ensuring that strong enforceable trade and environmental rules are in the core of all new trade agreements.
Bush: NAFTA has enabled Mexico, Canada and the United States to expand our solid, dynamic, and mutually beneficial trading partnership. In its first 10 years, NAFTA has helped increase exports to Canada and Mexico by 85%. NAFTA has been a powerful force for increasing the international competitiveness of all three economies, for attracting enormous flows of inward investment, and for contributing to the record productivity growth we have experienced for the past decade.
My administration has enforced our trade agreements fairly. These agreements are helping to in-source hundreds of thousands of jobs to the United States. More than six million Americans draw their paychecks from foreign companies, working right here in the United States. By keeping our markets open, we are helping Americans compete in the global marketplace on a level playing field.
We will continue to pursue free and fair trade agreements that will open foreign markets to American businesses and ensure that our trading partners are abiding by their commitments.
