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Throughout the 2016 presidential campaign, the economy has been the strongest issue on the minds of most Americans. However, any political discussions about the economy often miss the fate of small businesses.

In 2014, the Brookings Institute, a progressive-leaning think tank, issued a report that the U.S. economy has become less dynamic and less entrepreneurial. More small businesses leave the economy than enter it.

At the beginning of this year, Gallup reported that according to the U.S. Census Bureau, the total number of new business startups and business closures per year – the birth and death rates of American companies – have crossed for the first time since the measurement began.

Employer businesses – those with one or more employees – are the real engines of economic growth. Nationwide, 400,000 new businesses are born annually, while 470,000 per year are dying.

The leading candidates for both the Democratic and Republican parties have missed the important element for a robust economy – a strong and vibrant entrepreneurial focus.

Small Businesses Vital for Jobs and Economic Growth

In a December 2014 article for Inc.com, CEO and co-founder of Fundera Jared Hecht says that, “We hear all the time that ‘small businesses create jobs’. It really is true.

Although just 21.5 percent of all small businesses are employers, almost half of the nation’s private sector workforce (49.2 percent) is employed by small business – that’s 120 million people!

Since 1995, small businesses have been responsible for creating two out of every three  – or 64 percent – of net new jobs in our country. Accounting for 42.9 percent of U.S. payroll dollars, small businesses drive a ton of consumer spending into the U.S. economy, as well as income tax dollars into our government’s budget.”

Hecht also commented on the viability of small business to the U.S. economy, stating that “Small businesses also lead the way in terms of tech and new product innovation.”

The other fact missing during any discussion of small businesses is that all businesses start small. Remember that Apple started in Steve Jobs’ garage and Facebook began in Mark Zuckerberg’s dorm room.

Presidential Campaign Focuses on Big Business

Small businesses are the lifeblood of the U.S. economy. Unfortunately when most political discussions begin about American business, the discussion is always in the vein of the economy’s impact on corporate America.

No matter what the candidates state on the campaign trail about how they would jump-start the U.S. economy, they always leave one crucial component out. They fail to mention how changes to the U.S. economy would affect small businesses.

Throughout this presidential campaign, the candidates’ economic policies span an array of proposals, varying from tax reform to a huge expansion in the federal government’s reach to all phases of the U.S. economy. No candidate has examined how these proposals impact small businesses.

 

Candidates Vary in Their Economic Solutions

Hillary Clinton’s website states that she wants to help small business by cutting red tape which holds back the growth of small business and entrepreneurs. Hillary Clinton would expand access to capital, provide tax relief, simplify the tax code and expand small business access to new markets.

The unfortunate aspect of her proposals is the continued demise of small business. Federal acts such as the Affordable Care Act and the Dodd–Frank Wall Street Reform and Consumer Protection Act impacted the growth of small businesses the most. Obtrusive regulations and a chaotic tax system also affected the ability of small businesses to thrive.

Even Hillary Clinton’s opposition to the Trans-Pacific Partnership that she once supported as Secretary of State contradicts her current statements about expanding new markets for small businesses.

Similarly, Donald Trump’s website does not provide much detail about what he would do with regard to small business beyond his tax reform plan and his stance on U.S. –  China trade reform. We have to judge Trump based on his rhetoric and his past business deals, which give us very little idea about how his economic policies would impact small business.

To alleviate income inequality, Bernie Sanders repeatedly called for a massive tax hike on the top 1 percent of all Americans and a huge expanse in the federal government’s role into the economy. But Sanders has been silent about how these ideas would translate into building up small businesses across America.

Stronger Support for Small Businesses and Entrepreneurs Badly Needed

Far too often and especially in the last eight years, well-meaning laws passed by Washington had the opposite effect and made small businesses pay for the abuses of corporate America. The real winners have been corporations, because the unintended consequences of Washington’s policies have been a death knell to small businesses and the entrepreneurial spirit of America.

If America wants a strong economy, it needs to strengthen small businesses and renew the entrepreneurial spirit of America. This entrepreneurial spirit has always been the hallmark of this great country. Otherwise, we’ll continue to witness the stagnation of the American economy and the demise of the middle class.