WASHINGTON — Politicians and business groups often blame excessive regulation and fear of higher taxes for tepid hiring in the economy. Little evidence of that, however, emerged when McClatchy Newspapers 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.”
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 said he hired more workers this year, citing pent-up demand from customers.
