The Small Business Survival Committee, Washington, D.C., released its list of developments that had the best and worst impact on small businesses in 2001.
This years SBSC list includes:
1. Passage of the Bush Tax Cut Package. With 90 percent of business owners paying personal income taxes rather than corporate income taxes, the across the board reductions in income tax rates signed into law this year will improve the bottom line for many small businesses. A significant cut in the estate or “death tax” was also a huge positive about the plan.
2. Deep Interest Rate Cuts. The Federal Reserve cut short term interest rates from 6.5 percent to 1.75 percent in 2001, a whopping reduction. While access to credit is still a big issue for small businesses, lower rates should have a positive impact.
3. Sharply Lower Energy Prices. Gasoline prices have declined 25-30 percent over the past year. Combined with unseasonably warm weather late in the year, most small businesses should see their costs reduced significantly.
4. Moratorium on Internet Taxes. The information superhighway has become the fast lane to growth for many small businesses. Congress extended the moratorium on internet taxes for another two years, keeping the road-blocks out of the way.
5. Scuttling the Kyoto Treaty. President Bush declined to impose the regulations required by the Kyoto global climate treaty.
6. Settling the Microsoft Suit. With technology at the center of so many small businesses, the uncertainty about the future of Microsoft left many small businesses uncertain about the future. With the suit moving to settlement and the release of Windows XP, there’s a lot less to worry about.
7. Harry Potter and the Hobbits. Strong holiday movie openings signal that consumers are beginning to venture back out – a positive sign for the hard hit entertainment and hospitality industries.
8. Erased Ergonomic Regulations. Congress and President Bush repealed a host of ergonomic rules and regulations issued at the last minute by former President Clinton. The rules would have cost some $125 billion to implement.
1. September 11th. The horrifying terrorist attacks in New York and Washington, combined with anthrax scares dealt a blow to an already weak economy and were particularly devastating to the travel and hospitality industries.
2. The Recession. It wasn’t declared official until the end of the year, but its presence was felt throughout 2001. Private investment in the economy took a nose-dive along with the stock market.
3. Blackouts in California. The California electricity blackouts crippled countless California businesses.
4. The Resurrection of the Death Tax. While the Bush tax package eliminated the death tax, the bad news is that after ten years, the death tax is scheduled to rise from the dead and wreak havoc on small businesses once again.
5. Change in Senate Leadership. At the beginning of the year, the U.S. Senate was lead by Senator Trent Lott (R-Miss). During that time, an historic tax cut package was passed and votes on trade promotion and an energy plan seemed certain. Then, after Sen. Jim Jeffords left his party, Sen.Tom Daschle (D-SD) took charge of the Senate and the agenda changed. Senate votes on an energy plan, trade promotion and economic stimulus were ultimately blocked.
6. No Trade Clause. With small businesses accounting for 96 percent of all exporters, expanded free trade is vital to the future.
7. No Energy Plan. Troubles in the Middle East have once again raised awareness of the hazards of heavy U.S. reliance on foreign oil.
The Small Business Survival Committee is a 70,000 member nonprofit small business advocacy organization. Find out more at www. SBSC.org.