Posted by John Park on Feb 4th, 2009
Feb 4

Forgive me while I go on a tirade.
As you know, federal, state and local governments are suffering from major budget woes.  In CA, the franchise tax board (State IRS) is sending officials door-to-door to investigate if small retailers are properly collecting sales taxes.  Yes, they are going door-to-door to penalize small businesses and to levy heavy fines in cases where they might be operating as a retailer without a reseller permit.  Of course, they seem to be starting in lower income cities and in cities with a high-density of immigrants where tax codes might be difficult to understand or wade through.  The bright officials in CA have decided that this is a really good way to collect some revenues by kicking the small businesses while they are down.
When I learned of this, I was just outraged.
I really believe the “idiot level” of the federal, state and local governments have hit new heights in the past 6 months.  I don’t know any other group of people that can do more to stimulate an economy than small businesses.  I am referring to business with less than 25 employees—the real small businesses.  Every owner I know will almost immediately invest back in to their businesses whenever extra funds become available.  Small businesses are the “unsung heroes” holding this faltering economy together.  In essence, they are the duct tape. 
As idiots give other idiots billions of dollars of our tax money to companies on wall street and to the banks only to see them go on luxury retreats and to spend a million dollars to decorate an office, I am just astonished at the level of incompetence of our elected officials.  By the way, let’s not forget it’s these same companies who got us in to this mess in the first place.
In the meanwhile, small business owners work from dawn to dusk, 7 days a week, trying desperately to stay afloat.  They aren’t asking for bailouts.  They borrow from credit cards, ask their small staff to take pay cuts, cry quietly as they have to fire someone they consider family and their offices are decorated with a mix match of left-over furniture from luxurious places like Ikea and Staples.
Aside from the campaign trail video clips at some pancake restaurant, small businesses are pretty much being left alone to fend for themselves.  It’s kind of like how the smartest kid in the class gets the least attention from the teacher.  I think it’s fair to say that our officials have no idea what is going on in “real” small businesses.  We certainly shouldn’t be looking towards the SBA for help—the most useless organization in government.  For example, the news was all over the fact that the auto industry suffered a 50% decline in sales last month and mentioned the closure of auto dealerships across the country.  Of course this is bad news but the auto industry does not operate in a bubble.  What about the janitorial service who used to clean these local dealerships?  What about the diner next door who used to serve lunch to all of the employees of the dealership?  What about the guys who used to install the add-on stereo systems?  What’s happening to these businesses?
Instead of spending almost a trillion dollars in pork to grow the government, how about doing something meaningful and substantial for the “real” small businesses?
Here are some off-the-cuff ideas.
1)  Give 10,000,000 small businesses with less than 25 employees a pre-paid credit card for $10,000.  It would only be offered to businesses that have been around for at least 1 year and the card can only be used for a pre-approved list of vendors or product types (business expenditures). Cost = $100 Billion
2)  Loosen the rules for small businesses with less than 25 employees to be able to do business with the federal government.  These rules are cumbersome and have criteria many small businesses cannot clear like years in business, revenue minimums and initial filing costs.  Cost = Practically Nothing
3)  Offer no interest/unsecured loans to small businesses with less than 25 employees.  Have the businesses prove a track record of profitability.  Cost = Much less than the money we loaned to the auto industry and wall street
Do you have any good ideas?  Believe me… they need some good ideas.

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