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Small Business Statistics
Almost 5 million jobs have been created since August 2003 in our growing and robust economy. Most of those jobs were created by small businesses, which represent the driving force behind America's strong economic growth. Sound Republican leadership and conservative economic policies help small businesses to grow, expand, and keep moving the economy forward.
There are approximately 24.7 million small businesses in the United States, according to the U.S. Small Business Administration Office of Advocacy. The number one small business issue is the cost and availability of quality health insurance.
America's Small Businesses:
- Represent 99.7% of all employer firms.
- Employ half of all private sector employees.
- Pay 45% of the total U.S. private payroll.
- Have generated 60% to 80% of net new jobs annually over the last decade.
- Create more than 50% of nonfarm private gross domestic product.
- Are employers of 41% of high tech workers.
“The role of government's never to create wealth; it's to create an environment in which anybody, from any background, who's got a good idea can work and achieve the dream of owning your own business -- and therefore, by the way, employing more people.” (Remarks by the President on Asian Pacific American Heritage Month, 5/17/02)
- Women own approximately 6.5 million businesses that generated $950.6 billion in revenues, employed 7.2 million workers, and had $179.6 billion in payroll. The number of women-owned businesses has grown 20% between 1997 and 2002, twice the national average for all businesses.
- Minorities own 4.1 million firms that generated $694.1 billion in revenues and employed 4.8 million workers.
- A March 2006 U.S. Census Hispanic-Owned Business Report shows Hispanic-owned businesses opening at a rate that is three times the national average.
- About 22% of veterans in the U.S. household population were either purchasing or starting a new business or considering purchasing or starting one.
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The President's Small Business Agenda
To Help Small Businesses, The President Calls On Congress To Make The Tax Cuts Permanent. To maintain the economy's strength, Congress must make the tax cuts permanent. If Congress does not act, a family of four making $50,000 today would eventually see their Federal income taxes go up nearly 50 percent. Small business owners would also pay more taxes, which means less money to create new jobs and buy new equipment.
HSAs Are Making Health Care More Affordable And Accessible. Established by the Medicare bill signed into law by President Bush in December 2003, HSAs allow Americans to save tax-free dollars in accounts to pay for their health care expenses. These accounts are accompanied by high-deductible comprehensive insurance policies that cover preventive care and larger medical bills. Since January 2004, more than 3 million Americans have enrolled in HSAs, which are helping make health insurance more affordable for individuals and companies while providing greater choices and flexibility in how workers and employers spend their health care dollars.
The President proposed to build on this success and expand HSAs by:
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Giving Individuals That Purchase HSAs On Their Own The Same Tax Advantages As Those With Employer-Sponsored Insurance. The President proposes making premiums for HSA-compatible insurance policies deductible from income taxes when purchased by individuals outside of work. In addition, an income tax credit would offset payroll taxes paid on premiums paid for their HSA policies. This will level the playing field for those who currently do not have access to employer health care plans, including the self-employed, unemployed, and workers for companies that don’t offer health insurance. For Americans who are not working, especially early retirees, premiums for the purchase of non-group HSA plans would now be allowed tax-free from an HSA account.
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Eliminating All Taxes On Out-Of-Pocket Spending Through HSAs. The President proposed allowing Americans with HSAs and their employers to make annual contributions to their accounts to cover all out-of-pocket costs under their HSA policy, not just their deductible as provided under current law. This will allow patients to cover all their out-of-pocket expenses tax-free through their HSA. The new proposal would also provide a credit for payroll taxes paid on HSA contributions made by individuals. The President's HSA proposals are projected to increase the number of Americans with HSAs from the currently projected 14 million to 21 million by 2010, a 50-percent rise.
The President Is Working To Make Health Care More Affordable And Accessible. Congress needs to expand Health Savings Accounts (HSAs), which are helping put patients in charge of their health care decisions. With HSAs, workers and employers can put money into tax-free accounts to be used for out-of-pocket medical expenses. Congress needs to pass Association Health Plans that would allow small businesses to join together and buy insurance at the same discounts that big companies receive. The President has proposed expanding the development of health information technology. Also, Congress needs to pass common-sense medical liability reforms that will allow doctors to focus on patients and control medical costs.
The Administration Is Addressing The Burden Of Junk Lawsuits. The Congress passed and the President signed class-action and bankruptcy reform, but more work remains to be done. Congress must also pass asbestos litigation reform that ensures victims are compensated fairly while curbing the overly burdensome cost of lawsuits on American businesses. The President supports the Lawsuit Abuse Reduction Act, which would penalize frivolous lawsuits.
The President Will Continue To Work On Making America Less Dependent On Foreign Sources Of Energy. The President signed the energy bill to help America conserve more energy, make cleaner and better use of existing resources, and promote the development of renewable and alternative sources.
To Keep The Economy Growing, The United States Must Continue Opening Foreign Markets. To ensure economic growth and create new job opportunities for Americans, the Administration will continue to open up new markets for American products and services overseas. The Administration is also working to ensure a level playing field for American products. The President strongly believes that so long as there is a level playing field, the American worker, entrepreneur, and farmer can compete with anybody, any time, any place.
In His State Of The Union Address, President Bush Announced The American Competitiveness Initiative (ACI) To Encourage American Innovation And Strengthen Our Nation's Ability To Compete In The Global Economy. This ambitious strategy will increase Federal investment in critical research, ensure that the United States continues to lead the world in opportunity and innovation, and provide American children with a strong foundation in math and science. The American Competitiveness Initiative commits $5.9 billion in FY 2007, and more than $136 billion over 10 years, to increase investments in research and development (R&D), strengthen education, and encourage entrepreneurship and innovation.
The Economy Is Strong And Continues To Grow
GDP Growth Is Strong. Real GDP increased 3.5 percent in 2005, and growth was revised up from an original estimate of 1.1 percent to a 1.6 percent annual rate for the fourth quarter of 2005. The economy has been growing for 17 straight quarters, and the composite index of leading indicators increased 1.1 percent in January, indicating continued economic growth. In the last five years, the President's tax relief has helped spur growth by keeping $880 billion in the hands of the American people. The Administration has reduced the growth of non-security discretionary spending every year since 2001, and at the President's request, Congress cut this spending last year.
State Unemployment Rates Fall. As of January, the unemployment rate is now at a record low in five states: Nevada, Florida, West Virginia, Montana, and Idaho. Over the past year, unemployment rates have decreased in 46 states.
Incomes Increase. Real disposable incomes have risen 2.2 percent over the past 12 months. Since January 2001, real after-tax income per person has risen 8.2 percent. Real household net worth is at an all-time high of $51.1 trillion, and the median net worth of American households rose 1.5 percent between 2001 and 2004.
Manufacturing Expansion Continues. The Institute for Supply Management (ISM), a private research group, reports manufacturing activity grew for the 33rd consecutive month in February. The ISM's manufacturing index reading of 56.7 indicates continued sector expansion. According to the Federal Reserve, over the past 12 months total industrial production rose 3.1 percent and manufacturing industrial production rose 4.5 percent, including 0.7 percent in January.
Inflation Remains Contained. The core Consumer Price Index (CPI) rose just 0.2 percent in January. Core CPI has increased a moderate 2.1 percent over the past 12 months, indicating core inflation remains contained.
Retail Sales Rise. Nominal retail sales rose 2.3 percent in January and are up 8.8 percent over the past 12 months. In January, real consumer spending posted a solid 0.4 percent gain and increased 3.6 percent over the past year.
Service Sector Grows. The ISM reports non-manufacturing business activity grew for the 35th consecutive month in February. The ISM's business activity index reading of 60.1 indicates continued sector growth.
Productivity Growth Continues. During the past four quarters, productivity has increased 2.5 percent. Productivity has grown at a 3.4 percent annual rate since the business-cycle peak in the first quarter of 2001.
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