President Bush is highlighting a few of his second term initiatives as being important for entrepreneurs. As reported at Inc.com:
"'To make our economy stronger and more competitive, America must reward, not punish, the efforts and dreams of entrepreneurs,' President Bush said. He then proposed measures to reduce the number of class action lawsuits; pushed for Association Health Plans (AHP); and urged Congress to overhaul the tax code."
While overhauling the tax code is at the top of my list (well actually abolishing it replacing it is at the top of my list), it is growing clearer that the best we can hope for is some tax "simplification" and a push to make recent tax cuts permanent. The last big push for tax simplification under Pres. Reagan ended up being known as the full employment act for tax accountants, as it actually made the code more complex. This is in my view an opportunity lost.
Tort reform is clearly a good thing for business and society, but not really specifically an issue for entrepreneurs.
The NFIB explains how AHPs will work. "To improve access to health benefits for workers in small businesses, the president has called for legislation to authorize Small-Business Health Plans (or AHPs), which would allow small businesses to join together through industry and professional associations to purchase affordable health benefits for their workers."
The budget also looks toward health care savings accounts as a major health care policy initiative aimed at small business, including "$19.2 billion over 10 years in tax rebates for small businesses that contribute to their employees' Health Savings Accounts, to encourage more small employers to offer health benefits."
AHPs and health care savings accounts may be good ideas within our current system, but they are not the bold initiative from a conservative party with control of both the executive and legislative branches that many had hoped for during this term. Our health care system is not something that can be fixed by a little trimming and shaping around the edges. Bold initiatives, including eliminating a tax code that targets health care as a major social policy area for legislative micro-managing is a start.
The NFIB summarized a few additional central economic planning initiatives in the budget that may offer some short term benefit, but as most research now shows will offer little long term help.
* $10 billion over 10 years in tax incentives to create economic opportunity zones in areas transitioning to new and emerging industries.
* $27 billion through 2010, to make permanent the Research and Experimentation tax credit to aid innovators.
* $210 million, an increase of $46 million, for assessment and clean-up of about 600 brownfield sites, to spur development in cities' former manufacturing areas.
Governments are not very good at picking and targeting economic winners. More emphasis on getting the government out of the way of free markets is what is needed to sustain our entrepreneurial economic expansion.
