76-17-B8
- Main Page \ Reagan Radio Commentaries \ 1977
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Small Business[edit]
Transcript[edit]The federal government has different definitions of what constitutes a small business, depending upon the field its in. One definition that seems to fit all is "an independently owned and operated business that is not dominant in its field" Some small business associations consider any business with fewer than 500 employees as "small". Now, if you run a gas station or dry cleaning shop and you have two or three employees, 500 may seem pretty big to you. But, compared with the industrial giants and their tens of thousands of employees, it's still "small". The "smalls", as they are nicknamed in Washington, are getting an increasingly sympathetic ear in the capital these days. Congress, it seems, has discovered that, proportionately, small business investments create more jobs than investments by big business. This is because small business relies more on human labor than it does on automation. So, the idea is growing on Capitol Hill that by improving the climate for small business, we may be finding at least a partial solution to the unemployment problem. Several specific ideas are under discussion now. Various associations which represent the men and women who run small businesses are pushing members of Congress for action this year. The National Venture Capital association, for example, makes the point that when a small business owner sells, chances are that he'll reinvest him money in another small business. So, this group reasons that high priority should be put on amending the federal tax code to allow the seller of a small business investment to defer his capital gains tax liability, to the extent that the proceeds from his sale are reinvested in another qualified small business within 24 months. Economist Eliot Janeway underscored that point recently when he testified before a subcommittee of the Senate Finance Committee. He said -- QUOTE -- "Our experience of incentives to these (small business) people -- most notably in the form of tax deferrals on profits taken from homes sold and reinvested in new home building and buying -- leaves no doubt that the economy and the Treasury get generous value for consideration given. Why not extend this same incentive to capital gains cashed in and reinvested?" -- UNQUOTE. Another proposal of the National Venture Capital association that is being considered now is to put the capital gains tax rates on a sliding scale in order to encourage long-term small business investments. Whether these and several other proposals to give small business operators a boost will become law isn't yet certain, but one thing is: Washington has suddenly discovered the "smalls", and they're the talk of the town this year. |
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