May 21, 1975
Page 15667
PROGRESS REPORTED ON SMALL BUSINESS PROBLEMS
Mr. MUSKIE. Mr. President, it was my pleasure this noon to attend a luncheon hosted by the Smaller Business Association of New England; the Smaller Manufacturers Council, Pittsburgh, Pa.; the Council of Smaller Enterprises, Cleveland, Ohio; and the Independent Business Association of Wisconsin. Senator McINTYRE addressed the group briefly following lunch on the particular problems confronting small business and the approaches to those problems which are being developed in the Select Committee on Small Business of which Senator McINTYRE is a member.
Senator McINTYRE reported on early progress to revise the tax structure and review the paperwork form requirements as they affect small businessmen, and was joined by representatives of the Small Business Association of New England in reporting continued progress in making all levels of the Federal establishment more aware of the special problems confronting small businesses. I commend Senator McINTYRE and Chairman NELSON for the success the Select Committee on Small Business has achieved.
I believe the remarks of Senator McINTYRE merit the review of our colleagues who could not attend the luncheon this noon and ask unanimous consent that they be printed in the RECORD.
There being no objection, the remarks were ordered to be printed in the RECORD, as follows:
STATEMENT BY SENATOR THOMAS J. McINTYRE
Ladies and gentlemen: It is a pleasure to welcome the representatives of the country's outstanding regional small business organizations: the Smaller Business association of New England, the Smaller Manufacturers Council of Pittsburgh, the Council on Smaller Enterprises of Cleveland, and the Independent Business Association of Wisconsin. The Toledo group is here again, and I am told you are being joined this year by the Cincinnati group.
I bring you welcome from my good friend, Senator GAYLORD NELSON, Chairman of the Select Committee on Small Business, who had planned to be here with you. He has been called to the White House to represent the Senate in making the annual award to the Small Businessman of the Year.
I wish all of your organizations well. Your presence here is the most effective kind of communication with your elected members of Congress.
Over the years, the analysis of small business problems and proposed solutions furnished by these associations have proved invaluable. The Senate has obtained facts and figures which are often not available from other sources. The comments from these groups have been informed, and they have been timely.
Several provisions of the emergency Tax Reduction Act of 1975 are on the statute books today as a direct result of the testimony and statistical information provided by association witnesses in the Small Business Committee's hearings in February.
I can understand how frustrating it is when you attempt to explain to your local governmental units, your communities or your local newspaper that, altogether, the diverse firms which you represent add up to a mighty force – 13 million enterprises embracing 52 percent of all private employment, and 43 percent of the business product, and more than one-third of the Gross National Product.
We have the same frustrations when we attempt to make the Congress and the national press understand the importance of small business in achieving economic stability, promoting economic growth, and expanding employment.
And I am certain that almost every person in this room would tell me that one of the greatest frustrations encountered by small businessmen today is the paperwork burden. I am speaking specifically of the cost and time consumed filling out government forms.
Some of you know I've been deeply involved in the fight against the paperwork burden for nearly three years. Through the Small Business Committee, I've investigated the problem, reported its dimensions and proposed a number of remedies to ease the burden.
In these investigations, I've learned that form requirements are costing small business some $18 billion a year. Seventy percent of that total cost is imposed upon small business by Federal form requirements, more than 26-percent by state form requirements, and 1.25 percent by city hall form requirements. These are overall figures which vary from region to region. But, in general, the bigger the state, the more paperwork it requires of the small business within its borders.
Moreover, this is a burden which falls not only on the small businessman himself, it also falls upon the consumer, for part of the cost is ultimately borne by the buying public. This results in price increases, thereby contributing to inflation, and it makes small business less effective in competing with the giants of industry.
So I have tried to come up with some sound recommendations as to how best ease that burden, and I can report that progress is being made.
Last year three other Senators and I succeeded in getting a bill passed to set up a Federal Commission on Paperwork. We in Congress have named our members, and I am privileged to be one of those named. As soon as the White House names five additional members from the Nation's business community the Commission can begin its work in making recommendations to lessen the paperwork burden.
I am also planning to reintroduce legislation that would allow the Social Security Administration to change its quarterly wage reporting requirements to an annual requirement. The Social Security Administration initially opposed this recommended change, but I can report to you today that it now supports my legislation. I estimate this change alone can save small business about $250 million a year.
And speaking of taxes, for the first time since the Small Business Committee was founded 25 years ago we now have a three-step corporate income tax. We have a doubling of the "surtax exemption," the first increase since 1950. For this year and next year, businesses will enjoy a 10 percent investment credit and small business can apply the credit to $100,000 of used machinery instead of $50,000. For all future years, the Act increases permissible accumulated earnings from $100,000 to $150,000.
I would hope we can preserve and extend these advances.
Much work needs to be done in order to bring specific and convincing evidence of the merits of small business tax legislation before the Congress, the press and the public. The organizations here today have already begun this effort.
Our Small Business Committee will formally begin its in-depth study of the business tax system with public hearings on June 17, 18, and 19. We hope to lay down an official record that makes a sound case for tax equity for smaller and medium-sized independent businesses and the logical and resulting strengthening of our free enterprise system.
This is a task that will require even more of a cooperative effort than before, among your organizations and between the private sector, the Congress, and the Executive. For all of these reasons, we welcome you here and are looking forward to listening to your 1975 "Washington Presentation" on small business tax reform.