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American Morning

National Federation of Independent Business President Discusses Advantages of New Tax Plan to Small Companies

Aired May 07, 2001 - 09:36   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LEON HARRIS, CNN ANCHOR: Joining us now from the Treasury Department, in Washington, is Jack Faris. He's president and CEO of the National Federation of Independent Business. He is going to be meeting with the treasury secretary next hour to talk about what's going to happen next with the small business and the Bush administration.

Thanks for coming in this morning.

Let me ask you, first off, what is the first thing you expect to hear the treasury secretary discuss this morning?

JACK FARIS, NATIONAL FEDERATION OF INDEPENDENT BUSINESS: The first thing is is how important it is, here in Small Business Week, and to, in Small Business Week all across this country, how important it is to reduce the tax rates across the board.

Secondly, it's important that we make sure that the death tax is put to death. It's the most unfair tax that Americans pay today.

HARRIS: So that is the number one target, then, this so-called death tax, or estate tax, as other people call it?

FARIS: The number one thing for us is across-the-board tax relief. That will put money right in the hands of small-business owners, to hire new people, to do new things with new businesses.

Secondly, for the long term -- for our families' sakes -- we need to get rid of this death tax once and for all -- not just raise exemption levels, but get rid of this death tax.

HARRIS: Let me ask you about the tax burden as it is right now situated on small business. I've heard small business owners or advocates saying for years, or at least for the last couple of years, that this tax burden as it is right now is so onerous. What is so different about the tax burden that small business owners face versus that of larger businesses or average citizens?

FARIS: We have two problems. One is that over 85 percent of all small businesses do file as individuals with the Internal Revenue Service. The complexity of the tax code is a big problem for us. We don't have departments to send things to for explanation. The person who is opening the store in the morning is making all the decisions. The second thing that's so tough for us is that we spend $300 in all the costs to provide the taxes, and then we actually pay the IRS in taxes.

So an across-the-board cut helps us financially, but it also keeps it simple. We don't need to use the tax code for more social engineering, and that's the reason an across-the-board tax cut makes the most sense.

HARRIS: It's reasonable to expect that there will be some relief with that estate tax, or death tax, as you call it, sometime fairly soon. That at least is now being discussed. But what else do you see on the horizon that the Bush administration can reasonably get through Congress in the next year or so that would actually provide you some relief?

FARIS: I think that part of the relief we talked about is raising the expense level for the small business, so we can expense more in one year. It would help. We're trying to get Superfund money reauthorized so regulatory parties put more Superfund money into cleaning up the sites and not going to attorneys.

We need some more health reform, by having an association of health plans.

These are all things that this president, this White House, is supporting, and we are very pleased that this secretary of the Treasury not only knows that Wall Street's important, but that Main Street's important.

We're are excited about what we can do this year, but we need support of all small businesses to let the Congress know, and to reinforce to this White House, how important it is to help small businesses on Main Street.

HARRIS: You keep saying things like this "across-the-board" approach right now. You don't believe that there should be a more industry-specific approach here? Is it necessarily safe to assume that every single small business needs the same exact kind of relief?

FARIS: The key thing we like about across-the-board is that there's nobody in Washington, D.C., picking winners and losers and deciding which industry gets picked over another. What we're saying is give across-the-board tax relief. There are people in this town that like to be the ones to take our money and give some of it back and have us say thank you. What we'd like to do is just not send the money in the first place. That's the reason we think the president's increase of 4 percent for the government is enough -- not 5.5 percent or 8 percent.

That's the reason we think across-the-board cuts are a good start. That's the reason the things that we're hearing from the White House seem to make a lot of sense. They're resonating across the country. Our members are just deluging us with faxes saying this has to happen. So frankly, small businesses are excited. There are meetings going on in this town right now that no small business owners are being invited to, and those meetings are determining how much money we'll have left in our pockets to hire new people and to provide health care and other benefits for our employees. So we're excited about what Secretary O'Neill and this White House are doing to focus on small business.

HARRIS: You'll be in a meeting shortly that will address those issues.

We sure thank you for taking time to talk with us before you go there. Jack Faris of the National Federation of Independent Business, thanks much, and we'll talk to you down the road.

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