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Many of these are rules are mind-bogglingly stupid. Thus, if you want to open a lemonade stand in New York City, it will take you 65 days, including five weeks to complete a “Food Protection Certificate” and 15 hours for a “Food Protection Course.” If you are a farmer, you could be sanctioned by the Environmental Protection Agency for generating dust, which the agency calls “particulate matter,” even it occurs during a drought. Until recently, there was an EPA regulation that treated spilled milk as a “toxin,” putting milk spills on par with oil spills. The cost of complying with these regulations falls disproportionately on small businesses. By some estimates, small companies spend 364 percent more to comply with government regulations than their big-business counterparts. This amounts to a massive waste of potential prosperity.
Then there are the costs of new legislation. The most recent example is ObamaCare, which small businesses, represented by the FNIB, fought against. While the legislation has not yet gone into effect it is already taking a toll on small businesses. The NFIB says that its members report increases of 20 to 40 percent since the health care law was passed. That holds true for the businesses with 50 or fewer employees who are exempt from the provision to provide health care. Whatever the merits of the law, from a business standpoint it is yet another financial burden imposed by the government. Money that could have been reinvested in the business, for instance by hiring new workers or increasing productivity through new technology, will now be spent on health care compliance. Unlike the government-built roads and bridges that the president harps on, however, these regulatory costs remain largely unseen — except to the small businesses they stifle.
Obama is right in one sense. Small businesses are a vital part of the economy, creating over 60 percent of new jobs. All the more unfortunate then president’s response has been to saddle them with an expensive new health care bill, then to raise taxes on the 750,000 independent and small businesses that are taxed at individual income rates, and finally to diminish their own role in their success by exaggerating that of the government’s. Punishing job creators has costs, however. When voters consider them this November, the president’s preferred deflection – “somebody else made that happen” – may not sound terribly convincing.
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