The Small Business and Entrepreneurship Council (SBE Council) recently highlighted issues important to business going into the new year.
JOBS Act 3.0
This significant capital access and capital formation package is a must-do item. JOBS Act 3.0 passed the House by a massively bipartisan 406-4 vote, and SBE Council continues its push to ensure the legislative package is not left behind by the 115th Congress. In a letter to all U.S. Senators, SBE Council president & CEO Karen Kerrigan wrote:
The package is the culmination of many years of bipartisan collaboration and work and it would be a missed opportunity, and a disappointment to the entrepreneurial community, if the Senate did not act upon – and advance – this positive and powerful package of bills.
JOBS Act 3.0 will make a significant difference for our nation’s small businesses and entrepreneurs. Many provisions within JOBS Act 3.0 modernize and clarify federal rules and red tape, and make common sense fixes that will enable capital formation while helping to maintain and improve investor protections.
HIT Tax Relief
A reprieve from the Health Insurance Tax (HIT) is in place for 2019, but that needs to be extended through 2020. Health insurance costs are the #1 issue of small business owners and it is the #1 issue they want the new Congress to address in 2019. If Congress acts to extend the HIT moratorium (either in the lame duck or early on in 2019), it will make a huge difference for small businesses.
SBE Council president & CEO Karen Kerrigan has been making this clear in her meetings on the Hill and discussions with the White House. Last week, a bipartisan group of Senators sent a letter to Senate Majority Leader Mitch McConnell (R-KY) and Minority Leader Chuck Schumer (D-NY) urging action to extend the HIT moratorium. In the letter, Senators John Barrasso (R-WY), Cory Gardner (R-CO), Doug Jones (D-AL) and Jeanne Shaheen (D-NH) wrote:
“Unless Congress acts, insurance carriers will include re-imposition of the tax for 2020 as they begin the process of setting rates early next year. Absent further congressional action, the tax will result in higher health insurance premiums throughout the insurance markets.”
Kerrigan praised the progress made by talks between President Donald Trump’s and Chinese President Xi JinPing. The two leaders met in Argentina at the G20 meeting. Kerrigan said: “There is some very good news coming out of the G20 gathering in Argentina, and the results of President Trump’s meeting with President Xi is definitely a highlight for U.S. entrepreneurs and small businesses. Holding back on the additional tariffs on Chinese products, as President Trump has said he will do, is welcome news as we negotiate a bigger deal on key issues with China. In addition, President Xi’s step to designate fentanyl as a controlled substance is an important one to stem the flow of this deadly drug into the United States, which is devastating many American communities and harming our workforce.
President Xi has also agreed “to start purchasing agricultural product from our farmers immediately.” This is also positive news for many U.S. small businesses. The array of issues that will be discussed over a 90-day period to complete an agreement include: forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture. If an agreement is not reached in 90 days the 10 percent tariffs will be raised to 25 percent.
Trade with China is a Small-to-Mid Size Business Issue
-- Among U.S. employer firms exporting to China, 53.8 percent have fewer than 20 employees, 68.7 percent fewer than 50 employees, 78.4 percent less than 100 workers and 92.1 percent fewer than 500 employees.
-- When it comes to U.S. firms dealing with imports from China, 43.3 percent having fewer than 20 employees, 55.7 percent fewer than 50 employees, 65.3 percent less than 100 workers and 83.0 percent fewer than 500 employees.
-- More than 55 percent of overall U.S. imports rank as inputs for U.S. businesses.
Signing of USMCA
Kerrigan praised the signing of the U.S.-Mexico-Canada Agreement (USMCA), which will foster trade and enable business expansion through modernization of NAFTA. Kerrigan said this modern accord addresses key issues that will help to facilitate market expansion into Canada and Mexico, and is especially helpful to small businesses looking to go global.
“The USMCA will create stability and growth for cross-border commerce with Canada and Mexico, and various provisions of the agreement are particularly helpful for small businesses. As we have noted previously, maintaining this trilateral deal is critical for entrepreneurs and small business, as navigating one set of rules is more efficient and less cumbersome than dealing with two.
SBE Council is pleased to see modernized provisions that will directly help entrepreneurs and small businesses, such as:
-- Strong intellectual property (IP) protections,
--An increase in the de minimis level of shipment value leading to the reduction of costs,
--A new chapter that takes into account the vast and growing digital economy, which will ease friction and costs,
-- Eliminating a “local presence” requirement for cross-border service providers,
-- A new chapter on “good regulatory practices” that could reduce duplicative red tape and costs for small businesses,
-- The inclusion of specific support for small and medium-sized businesses regarding government procurement that focuses on policies to promote participation,
-- And increased opportunities for small farmers and food-businesses to export into Canada and Mexico.