Small Co. Owners Say Regulations & Taxes NOT Killing Business

Sunday, September 4, 2011 by McClatchy

by Kevin G. Hall 

WASHINGTON — Politicians and business groups often blame excessive regulation and fear of higher taxes for tepid hiring in the economy. However, little evidence of that emerged when McClatchy canvassed a random sample of small business owners across the nation.

"Government regulations are not 'choking' our business, the hospitality business," Bernard Wolfson, the president of Hospitality Operations in Miami, told The Miami Herald. "In order to do business in today's environment, government regulations are necessary and we must deal with them. The health and safety of our guests depend on regulations. It is the government regulations that help keep things in order."

The U.S. Chamber of Commerce is among the most vocal critics of the Obama administration, blaming excessive regulation and the administration's overhaul of health care laws for creating an environment of uncertainty that's hampering job creation.

When it's asked what specific regulations harm small businesses _which account for about 65 percent of U.S. jobs — the Chamber of Commerce points to health care, banking and national labor. Yet all these issues weigh much more heavily on big corporations than on small business.

"When you look at regulations in many respects, what a lot of people don't take into account is their secondary impacts," said Giovanni Coratolo, the vice president of small business policy for the U.S. Chamber of Commerce. "They pay the price, regardless of whether they are primarily the recipient of the regulation or they are secondarily getting the impact of it. They pay the price in higher costs, whether it is fuel or health care or whether it's being able to find access to capital."

McClatchy reached out to owners of small businesses, many of them mom-and-pop operations, to find out whether they indeed were being choked by regulation, whether uncertainty over taxes affected their hiring plans and whether the health care overhaul was helping or hurting their business.

Their response was surprising.

None of the business owners complained about regulation in their particular industries, and most seemed to welcome it. Some pointed to the lack of regulation in mortgage lending as a principal cause of the financial crisis that brought about the Great Recession of 2007-09 and its grim aftermath.

Wolfson's firm is readying to open a Hampton Inn this year in Miami on land purchased from a condo developer during the housing downturn. His business could be in line for higher taxes if President Barack Obama allows the current, lower rates on the richest Americans to expire in 2012 and return to previous levels.

That didn't seem to bother Wolfson, who through his partnership declares profit and loss as a pass-through on his personal income taxes, as many small businesses do.

"Higher taxes are not good for business, but some of the loopholes and deductions should be looked at," he said.

The answer from Rick Douglas — the owner of Minit Maids, a cleaning service with 17 employees in Charlotte, N.C. — was more blunt.

"I think the rich have to be taxed, sorry," Douglas said. He added that he isn't facing a sea of new regulations but that he does struggle with an old issue, workers' compensation claims.
Douglas told The Charlotte Observer that he's hired more workers this year, citing pent-up demand from customers.

"My theory is that the people that do have jobs are working harder and they have less time to clean. People were holding back for such a long time, and then they started spending a little more," he said.

Then there's Rip Daniels. He owns four businesses in Gulfport, Miss.: real estate ventures, a radio station and a boutique hotel/bistro. He said his problem wasn't regulation.

"Absolutely, positively not. What is choking my business is insurance. What's choking all business is insurance. You cannot go into business, any business — small business or large business — unless you can afford insurance," he told Biloxi's Sun Herald.

Since 2008, Daniels has opened one business and expanded another, hiring as many as 15 people thanks to lower labor costs and an abundance of overqualified job candidates. He credits the federal stimulus effort with helping to keep some smaller firms afloat.

"It allowed those folks to spend and have money and pay for the essentials," said Daniels, whose business pays corporate taxes. He grudgingly supports closing some business tax deductions to reduce the federal budget deficit.

"Who wants to pay more? I certainly don't. I want to pay my fair share, and I do," Daniels said, adding that he wouldn't resist loophole closures to cut deficits.

For Zajic Appliance in south Sacramento, California's capital city, business also has picked up. The company hired two workers this year, bringing the total to 18, said Christopher Zajic, who manages the family business.

One odd reason for his improving business: sales of bank-owned properties in a city that's among those hardest hit by the housing crash. When these houses sell, he said, their new owners generally replace appliances.

California used some of its federal stimulus money to pay for a "Cash for Appliances" program last year, a rebate program for purchases of energy-efficient washing machines and refrigerators.

"It spiked sales," Zajic told The Sacramento Bee, adding that he thinks the effort simply compressed sales into a shorter time period rather than created new demand.

For many small businesses, their chief problem is an old one: navigating the bureaucracy of the Small Business Administration to secure government-backed loans.

"My biggest problem is the current status of the banking system and how it's being over-regulated," Dennis Sweeney, a co-owner of Summit Sportswear Inc., told The Kansas City Star. "I want to grow this business, and I'm using the same credit line that I've been using for five years."

Kansas City-based Summit, 20 years old, supplies college-licensed clothing to university bookstores in four Midwestern states. Sweeney hired his fourth employee in August. He's adding licenses to sell apparel to colleges in the Southeast and Atlantic region, but his company doesn't have inventory or other collateral that bankers usually want to secure loans.

And the small local banks Summit deals with frown on the red tape required for SBA loans, after a loan he got in 2008 took three months of nightmarish documentation.

"It was only $35,000," Sweeney said. "Our bank basically said it would never do that again."
Other small firms say their problem is simply a lack of customers.

"I think the business climate is so shaky that I would not want to undergo any expansion or outlay capital," said Andy Weingarten, who owns Almar Auto Repair in Charlotte. He's thinking about hiring one more mechanic.

Added Barry Grant, the regional president of Meritage Homes Corp., in California, "It starts with jobs. ... There's an awful lot of people sitting on the fence; they're waiting for a sign."

One reason hiring remains dampened is the prolonged slump in the housing sector, a driver of the pre-crisis economy. Meritage builds homes in California and six other states. It'll build fewer than 1,000 homes in the Golden State this year, well below the 2,500 annually it built during boom times.

Another cause of sagging demand for new houses, Grant told The Sacramento Bee, is the planned October change to loan limits in order for a homeowner to qualify for a federal government-insured home loan. It was boosted to as high as $769,000 in parts of the country during the financial crisis, but Republicans in Congress have pushed for a return to lower limits and less government involvement in the housing market.

In Sacramento County, the change would mean a new loan limit of $474,000 to qualify, well below the current $580,000. Around the nation, the loan-limit change has created uncertainty.

"Any uncertainty in the market makes people hold off," said Grant. "It builds a certain level of uncertainty."

Sometimes a small business's struggle has nothing to do with government at all.
Lynn Swager, a co-owner of Brass on Ivory in Edgewater, Md., sells, rents and repairs musical instruments. She faces a completely different sort of challenge.

"The thing that chokes us, believe or not, is the Internet. There are so many things that are accessible on the Internet that they can purchase for less than I can purchase from my distributor," Swager told McClatchy. "Everybody thinks the Internet is this great thing that is happening to the world, but it is really, I think, killing a lot of small business. People that we talk to that are no longer in business say the same thing exactly."

Who Will Feed the People?

Obstacles to Small-Scale Agriculture in the US
By KOLLIBRI terre SONNENBLUME

"In the future, more people will have to grow their own food" has become a truism among pundits and observers who are paying attention to the changing state of western industrial civilization, and of the U.S. in particular. Declining energy resources, ecological degradation, and global financial disolution are a few of the trends that are and will be impacting agriculture-as-we-know-it, and forcing agriculture-as-it-will-be.

That chemical-based farming is a failing experiment has been well-documented elsewhere; numerous books and articles have explored declining soil fertility, chemically-resistant weeds and pests, the tainting and depletion of irrigation water, the shrinking diversity of seeds, the dangers of genetically modified crops, and the plummeting nutritional value of fruit, vegetables, and grains. I will not reiterate these issues here, except through examples that address my points, which concern the future of agriculture.

The "need" for a smaller-scale, non-chemical-based agriculture is clear. So are the attributes that it must have. This agriculture will be regionally-based, because the means for shipping produce around the world will no longer be profitable. This agriculture will be based more on animal power (two-legged and four-legged), because machines will be few, and the fuel for them too expensive or unavailable. This agriculture will focus on soil-building rather than chemicals, because the chemicals are sourced from the same raw materials that make the fuel. This agriculture will break with monocropping over hundreds of acres and instead utilize small parcels intercropped. And, this agriculture will have to involve much more than 2% of the population, even if that population is in decline.

I must mention that, in my opinion, the forces at work in the world today -- energy, ecology, economics -- are of such a large scale and their inertia so powerful that we are being coy when we say we "need" to switch to a smaller-scale, non-chemical agriculture. I suspect that we "will be" making that switch, like it or not, planned or not. No need to rally for the ball that was tossed in the air to come back down. It's on its way, like all things that go up. But the transition -- the beginning of which we are living to see right now -- is a very tricky one, to say the least!

Despite appearances -- which include the mainstreaming of "Organic", and the growth of farmers' markets, CSAs (Community Supported Agriculture), and urban agriculture -- very little fieldwork (pun intended) is happening that meaningfully addresses the emerging challenges of our time. A "100 mile diet" for more than a few "sustainability" geeks is still the stuff of fantasy. The mega-farming system born of the 60's "Green Revolution" is still what puts food on the table of almost everyone in the U.S.

I am a farmer in Oregon's Willamette Valley. This season I have partnered with two other farmers and we are working about seven acres together, trying to grow vegetables, medicinal herbs (not OMMP) and staple crops such as legumes and grains. In the recent past, we were urban farmers in Portland, growing produce for our CSAs in little yards and empty lots while experimenting with staple crops on larger suburban and exurban plots.

Among us, we have over ten years of farming experience, a botany degree, and work in the restoration field, as well as above-average intelligence, impressive resourcefulness and a dawn-to-dusk work ethic rarely seen anymore these days in the U.S. (at least among white people). We are not trying to get $-rich, but we are not idealistic money-haters. Until the seed-and-feed, gas station, and hardware stores take barter, we need the cash. We do not limit ourselves to a single doctrine, such as permaculture. We are unconcerned with the pettiness of politics or the vagaries of the nation's culture. We are simply people who are aware of the emerging food crisis, and want to see what it takes to grow a sustenance-providing amount of food and medicine for ourselves and a few friends and family who threw investment our way.

We are farming on land that was formerly used for grass-seed production, and has been hammered with chemicals and big machines for decades. Over 50% of the cropland in the Willamette Valley is planted in grass-seed, so the lessons we are learning are potentially valuable for future farmers who will be attempting the same in this area. But the issues we are facing -- lack of soil fertility, residual chemical effects, out-of-balance insect populations -- will be found across the nation for anyone trying to farm on land that was conventionally abused.

While in the city, my bicycle-based CSA operation gained much media attention, so I was able to raise enough resources to give urban farming a very serious try. Unlike most urban farmers, I did not have rent or other bills to pay, so was able to devote myself full time. Having thus immersed myself in the practice, theory, and context of agriculture, both urban and rural, for the last several years, the following obstacles to sustainable farming have become obvious to me.

1) Not Enough Farmers

Less than 2% of the U.S. population is directly involved in farming. Two hundred years ago, it was over 90%, and as recently as the 30's it was still 40%. Increased mechanization and cheap fuel were the paired enablers of this historic shift to giant farms manned by a handful of people. The so-called "Green Revolution" of the 60's, with its "better living through chemistry" was the hammer that nailed shut the coffin on small-scale farming, which has been dying a drawn-out death in the decades since. Despite a small uptick in the number of small farms over the last decade -- due largely to the Organic trend -- most agriculture is still huge and corporate-run. The population of the U.S. and much of the world is utterly dependent on this system for sustenance, and will remain so while any transition takes place.

This 2% will have to grow, but how? Who wants to give up a working week of five 8-hour days for one that is seven 12-16 hour days? Who wants to give up a regular check for financial uncertainty and perhaps impoverishment? Who wants to give up their city socializing and entertainments (both increasingly electronic)? Or maybe their electricity and hot running water? Not most people I have met, whether the proposition is to farm in the country or in the city.

Many Portlanders I met were inspired by the urban farming beginning to take place in the city, and some dreamed of Havana. As portrayed in the film, "The Power of Community", a radical rearrangement of agriculture took place in Cuba after the fall of the Soviet Union and the attendant loss in resources. Non-chemical farming became the only viable option, and the practice of urban farming grew dramatically. The makers of the film claimed that Havana was now growing over 50% of the produce it consumed within its own city limits. Impressive and inspiring, on the face of it.

But Portland is and was not Havana. A few dozen people starting CSAs and selling to restaurants does not a food revolution make, and besides, Cuba's very different style of government was likely the major steering and empowering force in that shift. Most Portlanders would probably not appreciate the contrast in ownership models, etc., used on that island, were they to be imposed to them and their neighborhoods (which is not to denigrate Cuba or its response in any way).

Portland is a hypey town, and the press that urban farming got made it look much more impressive than it was. I know this from reading the articles about myself and my own operation, all of which but one had glaring errors that presented things not quite like they were. One result of the press coverage was that people made the assumption that "OK good, somebody's taking care of that," and went on with their days.

But no, nobody's taking care of that yet, really. Urban farming has still not attracted enough practitioners to be taken seriously.

2) Lack of Equipment for Small Scale Farming

Suppose you want to plant an acre each of wheat, soup beans, and millet. How does one plant, cultivate, harvest, and process crops on this scale? Wheat can yield over two tons per acre, beans and millet half a ton each. You can't efficiently seed plots of these size by hand. Or weed them, or harvest them, or thresh and winnow them. Not without a lot of people, that is, and the days are over when the whole village would drop what they were doing and turn out to bring in the harvests from the fields.

The vast majority of machinery available on the market today in the U.S. is geared toward the hundreds, or thousands (or even hundreds of thousands) of acres. It's too big to move around in such a small area.

The equipment needed for small acreage farming is no longer manufactured in the U.S., and hasn't been on a mass scale since the 70's. Most of the old stuff is sitting in rusty heaps at the edges of fields or has been repurposed as "yard art". Earlier this season, we watched helplessly as scrappers hauled away an old combine they had found in the blackberry brambles on the property we are farming. Being lessees, we were unable even to buy enough time to see if it was repairable, but we saw pieces go by that could have been used on their own for seed-cleaning at our scale.

Equipment for small acreage farming is still manufactured and sold in other parts of the world, including Europe, China, and India. The technology has continued to develop in these places, with new innovations improving on tried-and-true designs. We farmers have drooled over the beautiful machines that Ferrari is making. But the cost of purchasing and shipping this equipment to the States is a prohibitive factor for our operation.

The Amish and a few hobbyists have been keeping alive draft animal practices, but these folks are also few and far between. Animal husbandry is not a skill learned overnight, and, as with vegetables, some heirloom breeds that are good for field work have been lost or are dwindling.

In the city, the situation is easier, because the plots are usually small enough to be polished off with a walk-behind rototiller. Here, too, there are serious quality issues, and the best machines are made overseas, many of them in Italy. Regardless of how good the equipment is, some knowledge of small-engine repair will really help the farmer, especially to avoid costly by-the-hour fix-it shops, who might or might not do the job right.

Additionally, for farmers rural and urban, parts could eventually become an issue. If the economic fabric frays to the point where shipping becomes expensive, then the next skill the farmer will have to take up -- or better yet, find in someone else who wants to barter for food -- is metal fabrication, including welding. If you don't feel like picking up a pitchfork, consider enrolling in a VoTech.

3) Lack of Knowledge about Small-Scale Farming

The knowledge of how to grow on a smaller scale is also disappearing. The average age of an Oregon farmer is 67. If he (usually) even remembers how things were done before, who knows if he is capable of changing, or if there are enough of him around who are willing or able to teach younger people. The big equipment he uses cost hundreds of thousands of dollars and isn't paid off yet. What else is he supposed to do? Federal agricultural subsidies aren't going to Grandpa Grass Farmer; they're going to ConAgra, Cargill, and Archer Daniels Midland.

We have the pleasure of knowing the farmer in our area, Harry McCormick of Sunbow Farm, who founded the Willamette Valley Grain and Bean Project. Harry has been farming near Corvallis since 1972, and has a wealth of knowledge and experience about growing horticultural and field crops. He started the Grain and Bean Project a few years back to try to help farmers get out of the grass-seed business and start growing food. Thanks to his efforts, thousands of acres are in transition, but that's not as impressive as it sounds. Harry himself describes this work -- the work of cultivating staple crops on a small-scale basis -- as "fringe".

Old USDA publications from the early 20th Century (and earlier) will become more useful again, as they describe in detail many practical, reliable techniques that don't involve 40+ foot wide combines.

4) Lack of Financial Resources

Will there be a Marshall Plan for small-scale agriculture in the U.S.? Not from a president who appointed someone from Monsanto to the USDA. How about from the cities, counties or states? Nope. They're going broke and cutting essential services already. The private sector? There's no money in it. The non-profits with their grants? Only if you fit their ideological stripe and promise to play by their rules. Ralph Nader's bizarre vision of the super rich saving us is only slightly less far-fetched than the idea that the Galactic Federation will be raising us to the next level of consciousness in December 2012.

Though I had no difficulty selling shares to my produce CSA in Portland (and could in fact have kept a long waiting list), I have not had similar success with raising funds for our current project. I don't know why, for sure. Possible reasons: Staple crops and herbal medicines, delivered once at the end of the season, doesn't offer the same gratification as twice-weekly produce. Or, grains and beans lack the trendiness of urban farming, which in Portland has reached the status of sexy (for which I will gladly accept some credit!). Or, having moved to the country, I am now out-of-sight and out-of-mind. Or, I was just too outspoken for some people's standards, and their self-obsession led them to take personally what I meant culturally. Who knows?

The bottom line is that there ain't much of one. In our case, the only way we were able to invest as much as we have (a low five-figure amount), is because one of us had an inheritance from a recently deceased mother to draw on. Which is not exactly what most people would wish for, or that many can even look to as a possibility. Going into this year's season we had seeds, tools, books, and other hard-good resources (altogether worth another low five-figure amount) only because we had invested in those things so well during the urban farming years. We were not starting from scratch. In these ways, we had a financial and material advantage that other people can't count on.

Not that these resources have been adequate to the task; they haven't. We estimate that our project could only be truly effective if we had a low six-figure sum for a three year period. Who is going to hand that out, to tens of thousands of farmers across the nation?

5) Lack of Market

One farmer in the Grain and Bean project is sitting on 17,000 lbs. of garbanzo beans because he could not find a buyer willing to pay a reasonable price. While the big boys are continuing to be subsidized -- not just by the USDA, but by the U.S. military holding control of various regions and their resources -- the non-chemical farmer coming up in this country is unable to compete on price.

One year in the city, I calculated that my hourly wage was something like 5 cents. Even in a so-called "Foodie Town" like Portland, it was challenging to find a market for my produce. Most consumers, including restaurant owners, are still shopping for produce with a list in their hand, rather than learning from the farmer about what can and can't be grown in their region. On the first hot day of Summer, which happens sometime in late June in the mild Northwest, everyone wants tomatoes, watermelon, and corn. Nevermind that those crops are still 2-3 months away at that time of year (if they ripen at all).

The farmers bring some of this on themselves, by choosing to cater to perceived customer desires, rather than by concentrating on what grows best and presenting a balanced, nutritious diet to the customer, and educating them about it. For example, the Pacific Northwest is the best place in the U.S. to grow parsnips: the roots can winter in the ground and don't need to be dug up and stored, and, the sweet flavor comes out only after a couple-three freezes, but the ground doesn't get cold enough to kill them. For this second reason, California parsnips never taste as good. The temps just don't go down enough. Here is a delicious -- almost sugary when roasted -- vegetable to get you through the winter, along with carrots and turnips also from the ground through the cold months, and very few Oregon farmers are growing them.

Even if you grow something people want, making a profit is still a challenge. Restaurant owners want to pay a wholesale price that compares well with Cash-and-Carry, and farmers' market customers are often looking for a bargain, too. Farmers' Markets can be expensive to attend for the starting-out farmer, what with the costs of a tent, table, bags, a legal scale, etc., and with market policies such as mandatory liability insurance. Most Farmers' Markets would more accurately be called Farmers'-Market-Manager-and-Their-Non-Profit-Board Markets, as they have become highly regulated structures, making demands of farmers in the interest of creating their own personal vision of a market that matches their effete tastes. Gone are the days when you could just drive a truck up and sell produce out of the back, with no cost except gasoline and a tarp.

6) The Wasteland Left Behind by Conventional Farming

Much of the farmland in the United States is a wreck and not ready to eat out of. Here in the Willamette Valley, over 50% of cultivated acres are in grass-seed. Another sizeable percentage is in Christmas trees, for which very poisonous chemicals are used, including Atrazine, a ground water contaminant. Nurseries of ornamental plants account for another chunk. Only 5% of the Valley is in food production. That's a lot of poisoned, not-ready-to-farm land.

We are seeing first-hand the issues in making a grass-seed-to-food transition, and the picture is sobering. The first thing we discovered is that you can't simply till the grass under and plant. The list of crops that can grow unaided in our particular toxic circumstance doesn't go much beyond jerusalem artichokes, chicory and horehound. Soon after arriving, we transplanted healthy perennial medicinals into the ground and watched as they turned red immediately. Some grew out of it, some did not. They have all been stunted and in some cases misshapen.

These were the kinds of plants that are said to thrive in poor soils, and which we had never amended before. Tough old birds reduced to clipped weaklings. Sad to see.

Without the money to amend all the soil, we took to carefully dressing each spot or row where we would be seeding or transplanting. This has worked somewhat well, but is not a farming-technique that I would recommend. The result has been a field that is still predominantly infertile, with little "pots" of short-term fertility plugged into it. An act that's difficult to follow the second season, and not at all a long-term solution.

We were able to get a list of the chemicals used by the grass-seed farmers. Broad-leaf herbicides, 10-10-10 fertilizer, fungicides, and growth regulators were their main tools, with Round-Up at the end of the five to seven year planting cycles. A toxic brew, to be sure, but not nearly as intense as what people will find at sites where other crops were farmed.

The effects of these chemicals are persistent, even when the chemicals themselves are (allegedly) not. Fungicides take out the mycorrhyzal bacteria so important for healthy root growth, and must be re-introduced. When artificial nitrogen is used, the nitrogen-fixing bacteria in the soil stop fixing, and must be restarted. When broad-leaf herbicides are used, the diversity of plant life becomes constricted to those tenacious weeds that can survive the pounding, and their vigor in the absence of chemicals can quickly overcome the organic farmer's new crop.

Cover-cropping and other methods could eventually fix these hurting lands, but they take years. So, when people realize that they can't wait any longer to switch to small-scale, non-chemical farming, will it be too late? If it's going to take empty shelves in stores to make more farmers, then the future will bring starvation.

Interestingly, we found that the soil in the city was much cleaner and more productive than any of the country land we have worked (five different locations). The image in city minds of a pristine countryside is false. Many agricultural chemicals are flat illegal to use in urban areas. Nope, the country has become a toxic wasteland, and people have another thing coming if they think we'll just be able to fan out into the fields around the cities and start growing our own food when the machine breaks down.

7) Extreme Weather

The apparently more common instances of extreme climate events such as droughts and flooding are leading to crop losses around the world and in the United States. I will take no stand here as to whether these events are caused by human industrial activity, HAARP and weather modification, or are merely another trend like the "Little Ice Age" or "Medieval Warming" of the past. But as a farmer who closely observes the local weather, and who keeps up-to-date about other farmers' weather, it is clear to me that we definitely are in a period of increasing climatic instability as relative to immediately preceding decades.

Hundreds of hours of work and many months of growing can be wiped out by an early frost, a record heat-wave, or an unseasonable rain. You can't eat your insurance policy, even if you have one. This year, in our location, we experienced precipitation high above average in March, April and May, preventing tilling and hence the planting of spring grains. Then, in June, we got rain twice, the second time only a sprinkle. In July, we had one two-day rain event. Last year, the rains didn't stop until early July, also preventing tilling. Then the October rains started in September. Going back season-by-season, each year of the last six has been marked by different extremes of wet, dry, hot and cold, all considered atypical. So, abnormal is the new normal, which makes it very difficult to plan, if not plant.

Historically, agriculture has been marked by famine on a regular basis. That the U.S. has not experienced widespread crop-failure since the Dust Bowl is an historical abberration. With the floods in the Midwest and the droughts in Texas and the Southwest, perhaps we are witnessing the end of that lucky streak currently. In any case, the drama of weather will play itself out region-by-region, farm-by-farm, farmer-by-farmer, and does not seem likely to be easily predictable.

8) The Social Challenges

Sometimes when I'm out there in the field doing repetitive and arduous by hand because there's no other way to do it (sometimes because that's just how it's done and always has been done), I find myself wondering, "How do people think we are going to switch from conventional to 'sustainable' agriculture?" The on-the-ground facts paint a picture of mind-boggling challenges, tangled (by nature) logistics, steep learning curves, tremendous labor, and radical lifestyle change for which no one seems ready.

The people of the U.S. are, by and large, the pampered children of Empire, unaware and uninterested in their own priveledge, taking their war-won comforts as an entitlement and their narcissism as a birthright. For much of the rest of the world, the view is different: the globe is a plantation, its people slaves, and the U.S. is the master's house on the hill. The flabby inhabitants of that mansion don't want to go out into the fields for fear of getting their hands dirty. Or chop their own wood, or carry their own water, or so on.

Why does this matter? Because although we are all individuals, we are all -- whether we like it or not -- "in this together". U.G. Krishnamurti put it in terms of the cells in the body; each cell is its own individual entity, but each cell is dependent for its survival on all the cells immediately surrounding it, each of which is dependent on the cells around them, etc. There is no going-it alone. "Rugged individualism" has always been a myth.

When it comes to my own current dedication to farming, I have personally experienced what I can only describe as some kind of instinct with a species-centered focus, to work on our collective survival. I do not consider myself better or worse than anyone else for choosing this work. There is not for me a political, philosophical, or sentimental motivation. I offer no vision and have no hope. And I do not believe that I will survive trying times just because I am trying. I say all this to dissuade you from your own delusions of hope, if you have any.

Wishing, praying, or (a la Portland) "manifesting through intention" do not grow crops. Neither does hard work on a piece of land if that land is poisoned, or you lack the equipment or resources, or if the weather knocks you for a loop. Those are the circumstances that all the farmers, old and new, will be facing. Agriculture has always been a crapshoot, and it looks to me like the odds against are rising.

Small Business Owners Demand Repeal of Bush Tax Cuts for the Rich

Thursday, May 5, 2011 by The Huffington Post

by Zach Carter 

 

WASHINGTON -- Michael Teahan, like his father, mother, and uncles before him, is a small business owner. The 52-year-old has spent most of his adult life running his own businesses: a restaurant, a coffee bar and various companies involved in the espresso machine business.
"I was the only person in my family to go to college, because that’s not what we did -- we all opened up businesses," Teahan says. "For some people, that’s a big hurdle ... for us, it was like having lunch."

Teahan currently operates Espresso Resource, a company that imports espresso machine parts from Europe to sell to U.S. restaurants and coffee shops. And he’s doing very well for himself: The two-man operation clears about $1 million a year in total sales, Teahan says -- enough to secure himself annual income in excess of $250,000.

That makes Teahan one of the few small business owners to actually benefit from the Bush administration's tax cuts for the wealthy. He says the cuts save him about $12,000 a year, compared to what he paid before they were enacted. But as debates over the federal budget deficit have intensified, Teahan has found the political discussion increasingly divorced from the reality of his experience as a small business owner.

Tax cuts for the wealthy, according to Teahan, will do nothing to bolster his firm. They won’t affect his hiring decisions, they won’t encourage him to buy new equipment or help him move into a bigger warehouse. He says all of those decisions -- the nuts and bolts of actually running a small company -- depend on the his customers' economic conditions, not his personal tax rate.

"What we do in business, how we spend our money, how we allocate our resources -- that has very little to do with tax policy," Teahan says. "I map my business based on my customers, and what my customers want to buy, and what they can afford to buy."

It’s a common complaint from small business owners. While congressional Republicans and entrenched corporate lobbying groups like the U.S. Chamber of Commerce -- which is holding a Wednesday meeting on small business priorities -- and the National Federation of Independent Business (NFIB) have been pushing hard to preserve the Bush tax cuts for the wealthy by touting the interests of small firms, much of the small business community is demanding that those very tax cuts be repealed. The tax breaks for the wealthy will add $700 billion to the debt over the next 10 years, according to the White House's Office of Management and Budget. And many small firms say that money would be better spent on direct aid to the middle class.

"We are fed by our consumers, not by our tax breaks," says Rick Poore, owner of Designwear, Inc., a screen-printing business based in Lincoln, Neb. "If you drive more people to my business, I will hire more people. It's as simple as that. If you give me a tax break, I'll just take the wife to the Bahamas."

Poore emphasizes, however, that -- like the vast majority of small business owners -- he isn't among the elite class of taxpayers making $250,000 a year or more. He and his wife take in a combined $80,000 a year from their business. Teahan is an outlier, because most small businesses don’t make nearly enough to benefit from the Bush tax cuts for the wealthy.

"Most small business owners make less than $250,000 and so the tax cuts don’t benefit most of us, and they’re really taking important valuable resources away from the federal budget," says ReShonda Young, corporate vice president and operations manager for Alpha Express, a Waterloo, Iowa-based company that specializes in transportation services and snow removal.

Young also serves on the executive board of Main Street Alliance, a coalition of small firms. Main Street Alliance notes that 98 percent of small businesses will not be affected by the Bush tax cuts in any way.

"The reality is that most businesses don’t pay the top marginal tax rate,” notes John Irons, an economist with the left-leaning Economic Policy Institute. "Most small businesses won’t be affected at all by a reversal of Bush tax cuts for the rich.”

For his part, Poore, the screen-printer, sees some dark humor in the entire notion of wealthy small business owners. He says that any accountant "that allows $250,000 in profit to get through to my bottom line would be fired."

Teahan emphasizes that even the few firms that do qualify for the Bush tax cuts don't boost their hiring in response to the Bush tax cuts. For decades, small companies have been able to secure tax breaks on the expenses that actually affect their bottom line -- labor, rent, equipment and other necessary costs. The Bush tax cuts for the wealthy, by contrast, only affect how much of a firm's total profit owners keep for themselves.

"The economic premise, that people won’t hire because they might have to pay more taxes if they make more money, is beyond laughable,” says Lew Prince, owner of the Vintage Vinyl record store in St. Louis, Mo. "You hire when you think there’s a way you can make more money with that hire. The percentage the government takes out of it has almost nothing to do with it.”

So what really affects small businesses? High health care costs, which will likely be ameliorated by President Barack Obama’s health care reform, and limited access to credit in the wake of the financial crisis. Just as important to Teahan, Poore, Prince and other small business owners are federal economic policies that directly benefit their middle class customers. If extending tax breaks to millionaires means denying aid to the middle class, their firms will suffer.

"My customers work for a living,” Teahan says. "They’re working on espresso machines and selling coffee. They’re not these uber-rich Wall Street bankers. [My customers] need the money. If they’ve got money, then I'm doing great."

The upper-end Bush tax cuts are not corporate taxes -- they’re taxes on wealthy individuals. Many small firms are not corporations, and owners report their profits as the individual income of their owners. Some firms, like Teahan’s, choose to incorporate, though they never officially report a profit because all excess earnings are paid out to the owners.

The U.S. Chamber and the NFIB say that, because these business profits are reported as individual income, allowing tax hikes for wealthy individuals will hurt small business. The U.S. Chamber declined to comment for this story but NFIB spokesman Kevan Chapman says his organization has repeatedly polled its members and found that they favor the Bush tax cuts.
"We have over 300,000 members who would disagree with the notion that we don’t represent small business. The last time we balloted this measure was in November, and 89 percent said the federal government should extend those tax breaks," Chapman said.

There were 26.9 million small businesses in the United States in 2008, according to the Small Business Administration, though that figure includes millions of people who work on contract for employers but have no business, in the traditional sense, of their own. There were 6 million small firms with at least one employee.

Another small business groups beg to differ with the NFIB. The American Sustainable Business Council, which represents 70,000 small firms and social groups, maintains that "there is a strong business case for letting the tax relief for the wealthiest expire,” noting that doing so would "reduce the federal budget deficit and lessen the crisis with state and local budgets around the country.”

Frank Knapp, president and CEO of the South Carolina Small Business Chamber of Commerce has written on the Bush tax cuts issue for The Huffington Post. He emphasizes that many of the people who report business income on their personal income tax returns are bond traders, partners in corporate law firms, lobbyists and hedge fund managers -- not the kind of activity that most people think of as "small business.”

These alternative small business groups say that the debate over the Bush tax cuts has been heavily skewed by talking points from the NFIB and the Chamber. The Chamber has a long track-record of backing the economic priorities of corporate elites, while the NFIB has increasingly become a partisan wing of the Republican Party, as HuffPost detailed in January.
While the NFIB continues to support the indefinite extension of the Bush tax cuts for the rich, it opted last year not to fight for a bill that would expand lending to small firms. The tax cuts are like termites, eating away at our economy and our nation’s future,” says Holly Sklar, the executive director of Business for Shared Prosperity.

"Any small businessman who is in the NFIB is paying his enemies to stab him in the back,” says Prince, the record store owner.

Alpha Express VP Young agrees. "It's the corporate interests and the wealthy stealing our name to further their agenda," she argues.

While the upper-end Bush tax cuts would increase the federal debt by $700 billion over the next 10 years, the broader class of Bush tax cuts, which affect many middle-class taxpayers, would cost $3.1 trillion over the next decade, according to the Congressional Budget Office.

"We should have learned from the last decade that slashing taxes for the richest Americans is a great way to grow the national debt –- not jobs," says Holly Sklar, the executive director of Business for Shared Prosperity, a non-partisan small-business group funded predominantly by the Ford Foundation. "Few small businesses benefit from the top rate tax cuts, but many lose from a shrinking middle class and deepening budget cuts in everything from the Small Business Administration and education to vital infrastructure repair and modernization. The tax cuts are like termites, eating away at our economy and our nation’s future.”