Beware politicians protecting "small business"

Here we go again. Every thorny issue facing Washington—from financial reform to taxes to the current debt ceiling debacle—eventually becomes framed as doing what is right for small business. Which would be fine, if it weren't so often just a flimsy cover for a Big Business agenda. The latest example: House speaker John Boehner's rebuttal speech on raising the debt ceiling (to pay for expenses that Boehner and his fellow members of Congress have already approved, it bears repeating).

Boehner sprinkled his address with references to small business. Referring to President Obama's plan to cut spending while also closing corporate tax loopholes and letting tax breaks expire for the nation's wealthiest citizens, he said: "Having run a small business, I know those tax increases will destroy jobs."

Not so, according to some business leaders. As the American Sustainable Business Council, a coalition of business networks, pointed out in a letter to Boehner: 

"Please understand that not all business leaders agree with many of the points you make daily in the name of defending the private sector. It is inaccurate to lump together large and small business—and businesses in every sector of the U.S. economy--as if
all of our interests were exactly the same. Some might see this as a strategy to use the halo of small business to camouflage the excesses of big business."

The Council goes on to state that many business leaders believe raising revenue must be part of the solution, and that government services are critical for economic health.

"Cuts to programs for the young, old, disabled and unemployed will hurt not only our customer base, limiting their capacity to buy our products, but our nation as a whole. Further, we disagree with the perspective that any tax increase destroys jobs. We believe that there are important distinctions to be made between good taxes and bad taxes, between incentives that create jobs and real value for the economy and those that don’t. There are expenditures that are critical to improving productivity and the nation’s infrastructure and those that are a waste of money. Removal of certain subsidies for mature industries, in our view, does not constitute a tax increase but rather a smart business decision. This is how we run our companies – moving resources towards areas of greatest need in a constantly changing marketplace. "

The letter, written by executive director David Levine, points out that during the 1980s, Reagan raised taxes many times while  unemployment continued to fall. Ditto Clinton in 1993. And that corporate taxes as a share of federal receipts are at an historic low—all facts Boehner conveniently omits.

The Council raises two other important concerns: that the largest corporations rarely pay the statutory tax rate —after all, that's what their armies of accountants are for. Instead, the tax burden falls to small businesses who, despite creating almost all net job growth, are left footing the bill. And second, that job creation is the number one priority, so reduced tax rates should encourage jobs to be created here at home, not shipped overseas.  The Council's recommendations are a sane counterpoint to the shrill voice of the multinational-dominated Chamber of Commerce (although it would like to preserve Big Business tax breaks, even the Chamber insists the deficit ceiling must be raised).

Will Boehner take note? He may have once run a successful small business, but his sympathies seem to lie more with the deep-pocketed corporations that are filling his campaign coffers (and the Tea Party freshman that have hijacked the Republican party). Consider the following:

Three of the Speaker's five biggest funders this year are employees of three Wall Street firms: the hedge fund Paulson & Co., Moore Capital Management of New York, and Cantor Fitzgerald, reports Boston.com.

Securities and insurance firms were among his top donors last year,  according to the Sunlight Foundation. (The Sunlight Foundation, a nonpartisan organization that advocates for more transparency in government,  provides several handy tools to do your own sleuthing, by the way).

Not to pick on Speaker Boehner—he's just using the standard playbook for politicians these days. But when you hear an argument wrapped in the patriotic banner of small business, consider carefully the source.