A Better Deal for Delaware

Knowing that minimum wage legislation will hit a Republican roadblock in the Senate, some Democratic senators support attaching a package of small-business tax breaks to the Senate’s version of the bill, says Investor’s Business Daily (IBD).

Some of the proposals include:

Letting businesses with fewer than 100 employees offer “association health care plans” on a nationwide basis, shielded from state regulation, which would give small relief from rising insurance costs by spreading risk over a larger pool of employees.
Repeal of both the Alternative Minimum Tax and the Estate Tax, which hurt small businesses disproportionately.
Increasing the small-business expensing limit to $200,000; it’s now at $100,000 but will revert to $25,000 after 2009 if Congress fails to act.
Eliminating the “temporary” Federal Unemployment Tax Act unemployment surtax, passed in 1976, by cutting FUTA taxes themselves and scrapping the wasteful federal-state unemployment insurance system those taxes pay for so that responsibility for unemployment benefits can return to the states.
Small business has been the engine for the spectacular job growth under Bush and the GOP Congress, says IBD, and some Democrats do realize this. In Senate Finance Committee hearings, new panel chairman Max Baucus (D-Mont.) noted:

Businesses with fewer than 500 employees represent more than 99.9 percent of all American businesses.
They pay nearly half of the total American private payroll.
They have generated 60 percent to 80 percent of the new jobs annually over the last decade, and they employ 41 percent of high-tech workers.

Robert Samuelson writing in The New York Times in late December commented on a survey by the liberal think tank, Economic Policy Institute. It appears 2% of Americans say they are “upper class and 8% say they are lower class. 17% say they are “upper middle class”, 45% middle class and 27% say they are working class”.

The EPI poll was done to focus on the perceived middle class anxiety on jobs, health insurance and retirement income. Look at those two statements:

Most people today face increasing uncertainty about employment, with stagnant incomes, paying more for health care, taxes, and retirement while those at the top having booming incomes and lower taxes.

Or

Our economy faces ups and downs but most people can expect to better themselves, see rising incomes, find good jobs and provide security for their families.

As reported 61% to 34% chose the first statement. Plus, they don’t like:

66%-13% oil companies
49%-25% drug companies
35%-18% corporate CEO’s
59%-32% Globalization

The key item Mr. Samualson pointed to was the middle class may not be, but there is a huge gap between people views about the economy and their own personal situation.

- 32% rate the economy as excellent or good
- 53% rate their own personal situation as excellent or good
- 70% of Americans say they have or will attain the “American Dream”
- over 50% say success comes from a good education and hard work not from connections (18%) or being born wealthy (13%)

Mr. Samualson says both “Conservative and liberal elite” are out of touch with typical Americans. Conservatives he says focus on overall economic performance (GDP) and minimize individuals “hard work”. Liberals underestimate American emphasis on personal responsibility and over estimate the degree to which people see themselves as victims.

I couldn’t agree more.

In some cases we are our own worst enemy. Our personal productivity increases has raised corporate profits but have job growth and lets admit it the price of being middle class is higher than it used to be with bigger homes, cell phones, computers etc.

What can government do? Spending more money is not smart because every man, woman and child has $100,000 in unfunded government liabilities. No, making things more simple like taxes and access to health care. Maybe freedom and opportunity to save more.