Wednesday, April 04, 2007

Busniess is good for California

More and more movies these days portray the villains as “businessmen.” When people are polled about whether “businesses” should pay more taxes or be responsible for providing health care, the knee-jerk response is, “absolutely.” Yet, a look at some figures recently assembled by the Assembly Republican Caucus should remind people that most “businesses” are not big corporations but small firms, owned by your neighbors, operating in your community, laboring under excessive state regulations.

The following figures come from the U.S. Small Business Administration:
· California has about 14% of the nation’s small businesses.
· Small businesses represent 92% of all businesses in the state.
· Such firm employed 53.1% of the state’s workforce in 2004.
· Small employers with fewer than 20 employees on the payroll contributed 71% of all dollars paid to employees in 2004.

According to the U.S. Census Bureau, of the 696,301 firms in California:
· 319,053 have between 1 and 4 employees
· Another 120,000 have 5 to 9 employees
· 73,958 have 10 to 19 employees
· 65,681 have 20 to 99 employees
· 12,951 have 100 to 499 employees
· 5,447 have 500 or more employees.

When you consider the huge number of small businesses, the following rankings are frightening:
· The Small Business and Entrepreneurialship Council ranked California 49th out of the 50 states for small business friendliness in 2006. That ranking was determined by high personal income, capital gains and corporate income taxes, as well as the high minimum wage, health insurance mandates, and increasing government spending.
· The Tax Foundation’s State Business Tax Climate Index ranked California 45th in the nation on corporate taxes, individual income taxes, sales tax, unemployment insurance tax, and property tax.
· The Tax Foundation puts California’s top individual income tax rate as the highest in the nation.
· The state’s 8.84% flat corporate tax rate is the highest in the western U.S., and at $193 per capita in 2004, the 7th highest nationally.

I am reminded each year about this time as to how expensive it is to run a small business in California. It is the private sector that generates the revenue necessary for public sector employment to exist. “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”…..Ronald Regan

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