Small business owners may complain throughout the year about taxes, government regulations, and the economy; I know I do. On this day of Thanksgiving, it is a good idea to remember all of the things we have to be thankful for in the United States. Here are some you may have overlooked:
Taxes could be higher
We gripe about our current tax rules and the Medicare additional taxes poised to start for high-income individuals on January 1 of next year. Sure, these will be a burden on successful business owners and may impede their ability to hire more people, invest in equipment, and make capital improvements. And corporate tax rates in the U.S. are the highest of any of our leading trading partners.
But rates on individuals could be higher. According to one source, France’s top rate is 48% (with a proposed “supertax” of 75% on those making more than one million Euros), and Spain’s top rate is 52%. Western Europe on average has a top individual income tax rate of 46.1%. This compares with our current top rate of 35% (which could rise to 39.6% in 2013 unless Congress maintains the status quo).
And the top corporate tax rate may come down in the near future. President Obama has, from time to time, supported a reduction in this rate to 28% (and even lower for manufacturers). This could become part of comprehensive tax reform undertaking in 2013.
Regulations could be worse
Over the past decade, the federal government has issued about 38,000 new final regulations to govern not only businesses but virtually every other aspect of daily activity. Many small business owners complain that some regulations are choking the life out of their companies. But it could be worse. The WEF Global Competitiveness Index survey ranked the United States in the middle of Organization for Economic Co-operation and Development (OECD) countries in terms of regulatory burden.
For a report on 2013 regulations on small and mid-size businesses worldwide, go to DoingBusiness.org.
And there are some in Congress who are speaking out against regulations that lack common sense (i.e., those that impose heavy fines for violations without first issuing warnings). Hopefully the regulatory climate will improve.
Interest rates and inflation are low
Two of the key killers to business growth are high interest rates and high inflation. Fortunately, neither exists at the present time. Of course, deficit concerns could result in inflation heating up (which is a way for the federal government to resolve its debt problem), but that probably won’t happen anytime soon.
Freedom to pursue dreams is still alive and well
November is Entrepreneurship Month and a good time to remember that the U.S. is still the land of opportunity. Anyone, regardless of age, sex, national origin, religion, or education, can start a business and achieve success.
According to the Global Entrepreneurship Monitor (GEM), the U.S. continues to display the environment supportive for business startups. While there are countries with better startup-rates and more business-friendly environments, there are many where things are worse. All in all, we don’t have it so bad.
Happy Thanksgiving to all!