NASE Blogs

Self-Employed To Congress: Address Deficit Now

Tuesday, May 17, 2011

Posted by Kristin Oberlander - As the Federal government announces that it has reached the debt ceiling and has shuffled funds to meet the nation’s financial commitments, micro-businesses and the self-employed believe that spending for domestic programs, job creation initiatives, tax cuts and federal subsidies should be scaled back to address the deficit, according to a recent survey by the National Association for the Self-Employed (NASE).

Ninety-three percent of micro-businesses were either moderately or significantly concerned about the federal budget deficit. Seventy-four percent said that the federal budget deficit is a significant problem that needs to be addressed immediately. In a distant second place at 17 percent were respondents who indicated that the federal budget deficit is a significant problem that needs to be addressed after our economy fully recovers.

When asked the best way to reduce the budget deficit, 63 percent of micro-business owners indicated that cutting federal spending was their top priority. Thirty-two percent said both cutting spending and raising taxes were needed.

“Day in and day out, the self-employed are required to manage their budget and balance their books,” commented Kristie Arslan, executive director of the NASE. “It is irresponsible and puts our economy at future risk for our federal government not to do the same.”

The top three proposals for tackling the deficit that micro-business owners favored were:

  • Minimizing Social Security benefits for upper income recipients (65%);
  • Increasing the payroll tax cap on wages (at present individuals only pay Social Security taxes on wages up to $106,800) (60%);
  • Repealing and/or defunding the health care reform law (59%).

Contrary to the larger business population, the self-employed also favored (55%) phasing out the Bush tax cuts for those making over $250,000 as a way to curb costs.

Proposals that were opposed by the self-employed included an increase in the federal gas tax (77%), imposing a national sales tax (69%) and the elimination of all tax deductions and subsidies (61%).

“The self-employed and micro-business communities are willing to do their share to ensure that our federal budget deficit is addressed and our nation’s economy steadily grows,” remarked Arslan. “However, they are not as confident in the willingness of policymakers to step up and make the political sacrifices necessary to get the job done.”

Ninety-six percent of micro-business owners had little to no confidence that Congress would make the right decisions about addressing the federal budget deficit. When asked the same question about the Obama Administration, 82 percent had little to no confidence. Yet, overwhelmingly, self-employed respondents indicated they were very (24%) or somewhat willing (46%)  to make sacrifices in the form of higher taxes or a cut in government benefits if it meant that our federal budget deficit would be addressed in the next five years.

Comments from business owners:

  • We can't run our businesses or our households the way the government runs it’s "house", and the vote last year was a dramatic call to get that house in order. Small business owners, housewives, people who live on a budget, and the average person on the street can all see the waste; why can't our policymakers?
  • We have a spending problem, not an income problem.  We can only solve it by cutting spending. 
  • This problem needs to be addressed NOW! It is a very complex issue and will take considerable time to arrive at viable solutions. I think that all areas of spending/revenue should be looked at for possible adjustments.
  • If we cut even 10% of the defense budget, we could pay for many of our other programs!  Also, if we overhaul the WAY that health care is delivered, rather than how we pay for it, we could make it much, much cheaper.
  • The government needs to give up a significant amount of control they desire to have and let private enterprise have more freedom to do business without so many regulations.  Small businesses would grow and hire more workers if big government would get out of the way.
  • I have paid into Social Security since 1962.  It wasn't much then and I don't collect much now, but it's not an "entitlement" - it's MY MONEY.
  • Tax laws should be simplified by eliminating the provisions that allow special groups to receive tax breaks, which is the best way to increase revenues.

Full survey results are available online here.

Methodology:
Posted on the NASE Web site, the survey was available for members and other small business owners to take from May 3rd through May 11th . Over 500 self-employed and micro-business owners opted-in to the online survey and respondents were prohibited from taking it more than once.

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