The first thing Congress can do to help small business owners is reform the well-intended, but misguided and unworkable definition of a full-time employee in the Affordable Care Act (ACA). Earlier this year, the Obama Administration announced that it would delay the implementation of the ACA’s employer mandate and reporting requirements for a full year as they reexamined the potentially disastrous implications for small businesses. While that was a good first step, it did not alleviate the fundamental pain that small businesses feel with the law. The law requires employers with at least 50 full-time employees to offer health insurance to those working at least 30 hours a week – essentially redefining “full-time” from the traditional 40-hour workweek. If implemented as is, this requirement would have a tremendously adverse impact on the small business owners in the franchising industry, which includes restaurants, retailers, hotel and service-related industries.
The second thing that should be on the Congressional docket is comprehensive reform of the tax code. The franchise industry is in the unique position of representing both sides of the tax code: corporate and individual, so any reform must include both to be comprehensive. It is an encouraging sign that Sen. Max Baucus (D-Mont.) and Rep. Dave Camp (R-Mich.), the respective chairmen of the Senate and House tax-writing committees, are putting aside partisan differences to work towards comprehensive tax reform. Their efforts are aimed at encouraging investment and accelerating hiring that will allow businesses to press forward in creating the kind of economic growth our nation desperately needs. Let’s hope their colleagues in Congress rally behind their bipartisan leadership to address the needs of businesses of all sizes. IFA believes an approach to tax reform that lowers the effective tax rates of businesses, that is, the rate businesses actually pay, will ensure that all businesses, including pass-thru entities and corporations, receive the much-needed tax simplification and rate reduction tax reform should provide.
It’s easy to look at Congress and be cynical about the absolute dearth of agreement and accomplishment, but the reality is that Members of Congress often agree on more than it appears. Small business is an area of repeated praise from both sides of the aisle, and protecting a job-creating engine is something that politicians of any persuasion should be able to agree on. Let’s hope this fall the Congress (and the president) choose to move the ball down the field with meaningful policy reforms and not punt on its most fundamental responsibilities.
Caldeira is president and CEO of the International Franchise Association.