Much of our time is spent communicating our insights into public policies that interest small businesses. The blogs prepared by our team focus on issues which affect every facet of a business, whether it is taxes or healthcare or public sector opportunities.
Are Millennials Missing The Entrepreneurial Spirit? By: Aaron Richards, Intern at Madison Services Group, Inc.
“s are on track to be the least entrepreneurial generation in recent history,” Dane Stangler, the Vice President of the Kauffman Foundation testified last week to he U.S. Senate. Stangler pointed out that the decline in entrepreneurship represents a national crisis requiring immediate attention from policy makers. As a millennial myself, I find this to be alarming.
The Small Business Administration reported that in 2015, less than 2 percent of millennials reported self-employment, compared with 7.6 percent for
Generation X (born 1963 to 1981). Moreover, over the past 20 years, the United States has experienced a steady decline in business startups. Trends suggest that entrepreneurship amongst millennials will remain low for decades.
American entrepreneurship is acomprised of a al group of people
American entrepreneurship there
are steps that lawmakers can take
(1) Scrutinize existing programs: There are 45 different federal government programs that aim to help entrepreneurs. Congress and administrative agencies should devote resources to understanding their effectiveness and where cuts might be possible. Lowering costs of entrepreneurial experimentation promises to foster more entrepreneurship than another government program.
(2) Reduce regulatory complexity: This would not only help entrepreneurs but American firms. While there are already special regulatory provisions that apply to small businesses, Congress should consider revisiting regulations that may have reduced the volume of lending to young people attempting to start firms.
(3) Invest in data collect: The best way to monitor the health of American entrepreneurship is through data. Additional resources should be considered to augment and expand these efforts.
Entrepreneurship is vital to the American economy and democracy. At AEO, we believe America’s best entrepreneurial days are still to come. In our Linking Young Adults To Microbusiness report, we provide new pathways to economic opportunity to the youth by exploring all available options. This vision however will not become reality without the help and support of public policy. An economy that thrives from millennial entrepreneurship is a dream worth propelling.
Confusion Over WOSB Certification: Answers to FAQs To Assist Your Business
By: Ann Sullivan, WIPP’s Chief Advocate
When speaking to groups of women business owners, regardless of where or when, they express confusion on the state of the certification process for the Women-Owned Small Business (WOSB) procurement program. Women often say that they receive conflicting information and differing opinions from SBA district offices, vendors who offer third party certification, organizations and OSDBUs at the agencies. That doesn’t necessarily mean that anyone is deliberately trying to deceive women business owners, it means that those unfamiliar with the way things work in Washington are giving inaccurate information.
The information given in this article is based on our intimate knowledge of the law and the regulatory process with respect to this program. After all, we have been responsible for moving this program forward and making it work for fifteen years—so we are claiming credibility on this issue without hesitation.
Fact: Self-certification and third-party certification remain options in the program until SBA changes its regulations. Since the program was implemented in 2011, women can either self-certify by submitting the proper documentation to the SBA repository or choose to certify through a third party. SBA approved four vendors for third-party certification: the Women's Business Enterprise National Council (WBENC), the National Women Business Owners Corporation
(NWBOC), the US Women’s Chamber of Commerce, and the El Paso Hispanic Chamber of Commerce Women’s Business Border Center.
Why the confusion? Because the law that allowed for sole source contracts also included a requirement that at some point in the future, SBA must create a certification program that does not allow for self-certification. You can read the language of the law here.
As you can see from the law, the SBA can choose to go a number of different directions, such as accept state certifications, certifications from other federal agencies, keep third party certification or decide to start their own SBA WOSB certification.
What is the status of the change? Congress passes laws—agencies implement them through regulation. So, even though Congress passed this particular change to the program in 2014, the SBA has to implement it in order to take effect. The regulatory process looks like this:
1. The SBA issues an ANPRM (Advanced Notice of Proposed Rulemaking), which it did on December 18, 2015. This means the agency is gathering more information from stakeholders before it proposes a regulation.
2. The agency reviews this information, circulates it internally and government-wide for comments and prepares a Proposed Rule. The proposed rule puts forward a suggested path of action and asks the public to comment on it. Generally speaking, there is a comment period of 60-90 days.
3. The agency then reviews the comments and issues either a request for more comments or proceeds to a Final Rule. The Final Rule usually has 30-60 day waiting period before it goes into effect.
The SBA issued an ANPRM on this program change in December, but, since the law does not specify a timetable for when the agency needs to push forward, there is no projected date on when the SBA will finalize this change.
What does this mean for certified WOSBs currently in the program? No change. WOSBs that are certified, either self or 3rd party, are still consider certified. The possible grandfathering of these firms into any new system is a topic of the ANPRM (step 1 above).
What does this mean for WOSBs not currently in the program? The two options – self-certification or 3rd party certification with the vendors listed above – remain open to WOSBs.
Besides certification, are there any new changes to the WOSB program? Yes. The SBA is creating a new portal, called “SBA One” for all small business certifications. Women are the first small business group to be added to the new portal and is now where all women will go through to certify. Eventually, the other certification programs will be added to use this portal.
The SBA has closed the repository for this new upgrade. When it reopens as SBA One, all women will have to create a new account for the portal. For more information on this change, go to www.sba.gov/wosb.
Important to note: Women in the program who are in the process of winning opportunities should tell agencies who need to check their EDWOSB/WOSB status to contact the SBA at: firstname.lastname@example.org. SBA will verify the information during this time period. Be sure to go to the website above for detailed information.
Success: Sole Source Finalized
By: Ann Sullivan
When you’ve been working on a program for 15 years, it’s almost anti-climatic when you realize you won and it’s over. I suppose lawyers feel this way when they win a big case, or business owners when they close a major contract.
For me, the SBA announcement integrating a sole source component into the WOSB procurement program on October 14, 2015 marks the end of a long campaign by Women Impacting Public Policy (WIPP). First, we fought for eleven years to establish a program that gives a government buying preference to women-owned companies whose industries have been underrepresented. Not an easy fight – we had plenty of Congressional and White House opponents—it wasn’t until the Obama Administration came into power that the program was established. At the time, SBA Administrator Karen Mills made it her number one priority, which we will always be thankful for. We had strong Congressional proponents – Senators Cantwell and Shaheen and Representatives Speier and Graves.
Then, we had to make the program work. That required two major changes to the program in 2013 and 2014. The first change required lifting the award caps the law imposed on the program. The WOSB procurement program limited contract awards through the program to $4 million ($6.5 million for manufacturing). In 2013, Congress helped us get rid of those caps. The last big piece was the sole source piece—allowing contracting officers to award sole source contracts to women-owned companies through the program. This major change gives the program parity with other small business programs and again, required Congressional action. Effective October 14, agencies will be able to use this mechanism to award contracts to women whose companies offer innovative products and services.
As with all government programs, the rules are a little complicated and the ability to self-certify as a woman owned business will eventually have to change, due to Congressional direction in 2014. But for now, self-certification remains the law and women should be actively pursuing contracts through the WOSB procurement program whether or not they are self-certified or certified by a third party.
It is important to note that not all industries (NAICS codes) qualify for the program. You can find a list at http://www.SBA.gov/WOSB. We have developed a one pager that go through the rules of the sole source portion of the program and our GiveMe5 program has comprehensive information on the WOSB program. In addition, our ChallengeHER events are all over the country so that women can find out more about the program. The information can all be found at www.wipp.org.
The WOSB procurement program is in good hands. All the major pieces to make it successful are in place. When we started this effort in 2002, women received 2.7% of government contracts. Since the program has been in place, more than $500 million has been set-aside for women- owned companies. In fact, in 2014 the government awarded 4.7% of its contracts to WOSBs –a 75% increase since 2002. Now women business owners need to know how to use it with the help of SBA, the federal contracting community and organizations, such as WIPP.
Fifteen years seems like a long time, but when you are fighting for something—somehow it doesn’t seem that long. WIPP members and coalition partners were with us every step of the way. For this, I am exceedingly grateful.
From The Hill: Dodd-Frank’s Impact on Small Business Lending
By: Jake Clabaugh
Women entrepreneurs face unintended consequences of wall-street reform. According to a House Committee hearing yesterday, the Dodd-Frank Wall Street Reform and Consumer Protection Act, introduced in an effort to prevent another financial crisis, is contributing to small businesses’ inability to access capital from banks.
WIPP’s Access to Capital Platform has cited some of Dodd-Frank’s regulations as a contributing factor to the decrease in small businesses lending. Capital access is a lifeline for small businesses. It is essential for entrepreneurs to have access to sufficient capital to found and grow businesses.
The House Committee on Small Business convened lenders and experts to discuss how Dodd-Frank has affected the ability to provide entrepreneurs with critical capital. Access to private capital, including bank loans is a primary concern to women entrepreneurs as women-owned small businesses receive only 4% of private sector lending dollars. Additional regulatory burdens could be exacerbating this problem.
The hearing touched on many of the difficulties WIPP members have experienced when trying to access to capital. The Committee cited increased administrative burdens as a significant cost for small and community banks, a primary lender to small businesses. These regulations have increased the cost of making loans and therefore made it more difficult for banks and borrowers. The result is less capital for entrepreneurs.
The hearing also cited the direct impacts on borrowers. Many that would have qualified pre-recession are no longer able to obtain loans from banks due to tighter lending standards. WIPP’s platform advocates for modernized credit scoring that would level the playing field for women business owners.
Until Dodd-Frank is fully implemented, its complete impact will remain unclear. WIPP continues to review ongoing regulations as well as work with Congress to scale back unnecessary barriers to capital access for women entrepreneurs.
Overtime Rule is Over The Top
By John Stanford
Substituting for Ann Sullivan, John Stanford on WIPP’s policy team wrote this month’s WIPP Works in Washington article. Fear not, Ann will return with her article for the October issue.
The Department of Labor, it would appear, is working overtime. Two weeks ago, WIPP responded to the agency’s proposal to require labor history for federal contractors. Now, WIPP is addressing a different proposed regulation – this one making changes to overtime pay. Both proposals were well intentioned, and both pose risks to women entrepreneurs.
Disclaimer: this blog is a brief summary, so if your business may be affected I encourage you to read WIPP’s comment in its entirety.
It all began last spring, when President Obama directed the Labor Department to update overtime regulations, saying the standards for some employees had “not kept up with the modern economy.” Specifically, the so-called white-collar exemption was out of date. The exemption allows employers to avoid paying overtime (required anytime an employee works more than 40 hours a week) for executive, administrative, and professional employees because they typically have better pay, benefits, and privileges.
The exemption has three criteria. First, the employee must be salaried. Second, the salary must be above a certain threshold. Third, the employee duties must meet certain criteria – basically, you cannot just give someone a manager’s title and exempt them; they must be acting as a manager.
To answer the President’s call for modernization, the Labor Department proposed to update the second piece, the salary threshold, from roughly $24,000 to $50,440 and index it to economic growth. Essentially, this qualifies white-collar employees who make less than $50,000 a year for overtime pay if they work more than forty hours a week.
WIPP agrees with the President that our regulations do not match a 21st century economy, and we should work on updating these requirements for a fair and modern workplace. Moreover, companies that are purposefully skirting the rules on overtime pay and cheating otherwise qualified employees should be held accountable.
Nonetheless, simply doubling the salary threshold goes too far and achieves too little. While large companies in large cities may be able to afford a $50,000 salary floor, the entrepreneurial community is left with bad options: possibly cut employees to afford a minimum salary for others, or restrict working hours and set up an hourly tracking system. Notably, the Labor Department estimated only a quarter of employees will likely see higher paychecks. Others may see reduced hours.
In the comment, WIPP highlighted concerns about the cost to implement the rule, difficulties in application of the rule, and the dangerous impact on employee wages and benefits.
The Labor Department predicted that simply implementing this change would cost small businesses, including the vast majority of the nearly ten million women-owned firms, between $130-$180 million in the first year alone. That does not include the more than $500 million in increased wages small businesses are expected to pay. The Labor Department itself mentions that business could cut hours and benefits to make up for this loss.
Moreover, to ensure compliance with these new regulations, businesses will begin closely monitoring and tracking their employees’ work hours. Tracking and monitoring employee hours is very difficult, if not impossible, given the evolving dynamics of the workforce. Many white collar employees have flexible schedules, work from home, check and answer emails from smartphones or tablets and are no longer restricted by a rigid 9-5 schedule.
It also isn’t just companies. Non-profits face the same requirements. An exception for them (as well as small businesses) is so narrowly crafted it may not cover many mission-oriented organizations or the smallest of businesses. Both are places where working above and beyond forty hours a week may be more about commitment to a cause than a bigger paycheck. For this reason, WIPP asked that the exception be broadened to actually apply to small businesses and non-profits.
The idea that our regulations need to be updated is not political – it’s common sense. But often the regulatory pendulum swings too far as it has here. As proposed, women entrepreneurs could face the arduous tasks of transitioning current employees from salaried to hourly workers and possibly cutting benefits to make payroll all while tracking and limiting employee hours. Talk about working overtime.
OMWI: Take Advantage of Your Ally
By Ann Sullivan
Did you have any idea that federal agencies have offices in 20 federal agencies that focus on the promotion of women and women-owned businesses? There are. They are the Offices of Minority and Women Inclusion (OMWIs) in agencies such as the Consumer Financial Protection Bureau (CFPB), the Federal Housing Finance Agency (FHFA), and the Federal Deposit Insurance Corporation (FDIC).
Established in the Dodd-Frank legislation in 2010, by Congresswoman Maxine Waters of California, these offices are charged with helping women-owned businesses become vendors and ensuring that women are hired in the agencies and the financial institutions they regulate.
Advancing women is a practice the federal government that, until recently, was hardly ever focused on. In the federal government (nearly three million civilian employees), women are growing in number, though not necessarily influence. While 44% of the federal workforce is female, women hold only one-third of Senior Executive positions at federal agencies, according to Government Executive. One study by the Center for American Progress found that, on our current pace, it will take until 2085 for women to attain parity with men in leadership roles in our country.
But that can change. While recently moderating a panel of two OMWIs – one from the Federal Housing Finance Agency and the other from the Consumer Financial Protections Bureau – it became clear that OMWI could named the Office of Women Advancement, because of their mandate to advance women internally and externally with their agencies. Raising the number and authority of women within the government is at the core of the twenty OMWIs. While the history of these offices has been well documented, women business owners should know the ways they can take advantage of these offices.
Important to remember, these tips of using OMWIs to your benefit will largely only apply to the federal agencies dealing with financial matters or the Federal Reserve Banks. Nonetheless, using OMWI standards (discussed later in the article) with other agencies or in the private sector can prove to be a valuable approach.
Diversifying the Supply Chain
Along with encouraging diversity within the workplace, OMWIs exist to enable more contract awards to women-owned businesses. Section 342 of Dodd-Frank goes to say that efforts to assist women extend to contracting, where OMWIs must support “inclusion in all levels of business activities.” That’s a large mandate to help women win more contracts. Moreover, these are the only offices that serve all women-owned businesses, not just women-owned small businesses. For the growing number of “mid-tier” women-owned contractors, this is a new avenue for support and access.
Women are underrepresented in federal procurement opportunities, and OMWIs are trying to address this gap by awarding more contracts to women-owned businesses. OMWIs are only at the financial oversight agencies, thought their sister Offices of Small and Disadvantaged Business Utilization (OSDBUs) exist in most other agencies. With that in mind, if federal contracting is in your business plan, then you should use OMWIs to get in the door.
Inclusive Hiring and Leadership
The most obvious place for inclusion is within an agency itself. Section 342 of Dodd-Frank (which established OMWIs) states, “Each agency shall take affirmative steps to seek diversity in the workforce of the agency at all levels of the agency....” Importantly, diversity in the workforce explicitly includes within senior management—the most important and often most bereft of women across the federal government. For example, according to the FHFA’s 2014 OMWI report, only one-third of the FHFA’s executive leadership is female. Only slightly better is the FDIC where women make up 35% of leadership - despite nearly half of the agency’s overall workforce. OMWIs are tasked with creating a more fair and diverse workplace within an agency’s hiring and leadership teams, meaning that they have the ability to offset this imbalance and underrepresentation of women.
How can this benefit you? Twofold. First, and most obvious, is if you have dreamed of holding a position in the civil service, then go for it. Let the OMWI be your ally. For those less inclined to join the federal workforce, this policy benefits women: simply put, the more women inside helps all the women outside.
Setting the Tone
The arm of OMWIs, however, extends beyond the government. Referring back to Section 342, these offices are responsible for developing “diversity policies and practices of entities regulated by the agency.” It is no secret that women at the table in leading financial positions are the exception, not the rule. Fortunately, with the advent of standards (from OMWIs) to ensure inclusion, this may be changing, and women may have a growing leadership role in the financial sector.
The abilities for this to be useful to women business owners are again, twofold. First, as these standards are developed, women should be at the table prioritizing and developing the standards. In conversations with OMWIs, they welcome feedback about how to achieve their mission. More importantly, however, may be the impact these new standards have on commercial entities regulated by these agencies. In the real estate world, for example, this includes banks that issue, buy, and sell loans. Providing women a stronger role in such a space would better represent the demographics affected by the decisions that lenders make.
Bonus Benefit: Reporting Data
Mandated by law, OMWIs must submit annual reports available on agency websites. As a federally sanctioned document, the statistics and findings of these reports carry weight throughout government. In advocacy, especially at the federal level, numbers are everything. Culling these reports for data can get numbers that make the case. These reports, which are all available online, also provide data on regional differences and issues affecting women.
Taking advantage of available online resources is crucial in understanding the gaps, needs, and much-needed progress of women in the financial community. More importantly, this information can help your business determine its priorities in working with OMWIs.
On the surface, Offices of Minority and Women Inclusion are advancing women in four ways. Through diversifying the supply chain, inclusive hiring and leadership, setting the tone for the commercial world, and providing much needed data, OMWIs are dedicated to women. Take advantage of your ally—get to know an OMWI.
WOSBs: Now It's Your Turn
By Ann Sullivan
In the coming days, the SBA is expected to issue proposed rules to implement sole source authority for the WOSB Federal Contracting Program. To be clear, as many are anxiously waiting, sole source authority is not yet available. But for those following the program, the hopefully-soon implementation will mark the final step in a 15-year crusade to start and strengthen a small business contracting program designed to support women-owned businesses.
Jon Williams and Megan Connor authored an excellent article detailing the embattled history of the WOSB program. Their work was an essential element of the campaign to bring sole source; it validated concerns and offered solutions. Simply put, the program was hamstrung from the start—limited to small contracts, lacking the critical contracting tool of sole source authority, and restricted to only a third of industries.
With the enactment of the FY15 National Defense Authorization Act, women entrepreneurs celebrated rolling back many of these disparities. This was not an easy fight. It required a united advocacy effort from the women’s business community, champions in Congress and the Administration, and a ground game of women business owners second to none brought about legislative changes.
As the celebration comes to a close, however, real opportunities await. With parity between the programs achieved in statute, it is time to go out and use the program—that is, win contracts. Making that happen is now in the hands of women-owned companies across the country. But with so many changes in the last few years, many in the contracting community may be unaware of the new tools that they can use. Through proposals, market inquiries, conversations, and negotiations, women contractors should appropriately steer agencies toward the program.
To do that, business owners must understand the program—and be able to communicate how it works. This overview of the when, how, and why of the program, along with a few answers to frequently asked questions, is enough to arm every women-owned company with the knowledge to be the frontline advocates for the program.
With the new changes, companies in eligible NAICS codes (only one-third of industries are eligible) can effectively request any contract be procured through the WOSB program’s authority. Important note: to register as a WOSB/ EDWOSB, your primary NAICS code must be included in the program; for a specific contract to be set-aside, that contract’s NAICS code must be in the program.
The key to awarding a contract through the WOSB program is to ask early. Companies can request that a contract be set-side or sole-sourced (when implemented) in the pre-RFP stage. This is as easy as including an extra sentence to RFI/ Sources Sought responses: “We respectfully request you consider setting this contract aside through the WOSB program.”
If a company does not think other women-owned firms will compete, they will soon be able to request the contract go through the program via sole source. Since the program is relatively new, contracting officers may not necessarily know when to use the program. Women-owned companies need to help them out by requesting it.
Since its establishment in 2011, the program has developed a reputation as complex. Rightfully so—it is limited to only certain NAICS codes, has two parts (EDWOSB and WOSB) with varying income requirements, has both self-certification and 3rd party certification, had caps on award sizes and no sole-source (which all the other programs did). As one contracting official put it, “it was different, so it didn’t get used.” With the changes that organizations, such as Women Impacting Public Policy (WIPP) advocated for, it is now much simpler to use.
To combat the program’s reputation for difficulty, even as it begins to change, contractors should explain that the requirements of the agency are not insurmountable. To set-aside a contract, the contracting officer only needs to verify that WOSBs requesting the use of the program be registered in the System for Award Management (SAM). Only after selecting a company to award the contract to will the verification in the WOSB repository be required.
Verifying registration in SAM is simple: the company must be in SAM to begin with (which requires at minimum an annual update) and registered as a WOSB or EDWOSB (which covers both ED and WOSB provisions). Uploading documents to the repository is an additional, and sometimes forgotten, step. Too many women-owned firms fail to add themselves to the repository or fail to upload all the documents (have you?). Important to agencies, no formal justification and approval (J&A) is necessary to set-aside contracts through the program.
From an advocate’s perspective, an agency’s rationale to use the WOSB program is simple. 20 years have passed since Congress instituted the 5 percent goal for women-owned small businesses. It has never been met. In addition, Congress has often stated that it is in this country’s interest to have a strong industrial base and that includes women-owned suppliers.
But in reality, an agency will care more about their efforts to meet the goal—not the government-wide goal. The WOSB procurement program should be seen as a tool for the agency to meet its women-owned goal. Indeed, there is no order of preference between small business contracting programs—only market research and an agency’s individual goaling status. Conveying why the program has benefits for agencies is always a good idea.
In addition to the basics, women-owned companies should know a few details about the changes to the WOSB program that will impact procurement. A few frequently asked questions (and their answers) include:
Contracting Officers keep saying only small contracts can be awarded. Is that accurate?
No. A contract of any size can be set-aside through the program. Prior to 2013, there were caps on set-aside contracts, but those have since been lifted. Sole source contracts, when available, will be limited to awards of $4,000,000 or less (with an exception for manufacturing, which has a limit of $6,500,000). This is consistent with small business procurement programs. Again, sole source is not yet available, but may be available in 2015.
I have heard self-certification is going away. What will replace it? What if I am currently self-certified?
Part of the legislation that added sole source authority and expedited the NAICS review removed the option to self-certify as a WOSB. While self-certification remains an option until a different certification process is put in place, it is a change that is eventually coming. In the future, WOSBs must be certified by either a federal agency, a state government, a 3rd party certifier, or—possibly—the SBA itself (this would be a new certification process). It will be up to the SBA to determine if current self-certified WOSBs will be grandfathered in and when this portion of the program will be implemented.
My company does not fall into a WOSB/EDWOSB NAICS code. Can I appeal that decision?
No. The NAICS codes in the program were determined by a SBA study (Rand) in 2007 measuring underrepresentation of women-owned small businesses in federal contracting. Only a new study can update the codes. Fortunately, an accelerated study is required to be completed in January 2016. Although required by Congress, the SBA Administrator has been strongly supportive of this effort.
What is the difference between EDWOSB and WOSB?
ED stands for economically disadvantaged, and, accordingly has limits for women owners on income (less than $350,000 averaged over last three years), net worth (less than $750,000 not including equity in the company, equity in primary residence, and retirement account), and total assets (less than $6 million, not including retirement accounts).
Being an EDWOSB matters because in certain NAICS codes (see above), only EDWOSBs can compete for set- asides. Since EDWOSBs are, by definition, WOSBs, they can compete in both EDWOSB and WOSB NAICS code set-asides. In other words, EDWOSBs qualify for all NAICS codes included in the program.
More Taxes? No Taxes? How About Fair Taxes
By John Stanford
WIPP recently submitted testimony to the House Small Business Committee on comprehensive tax reform. This blog gives an overview of WIPP’s advocacy efforts. For more details, I encourage you to read the testimony. Our government relations team strives to make official communications as easy-to-read as possible, but should you have questions please reach out to WIPP.
Women entrepreneurs deserve a tax system that rewards the effort, tenacity, and risk it takes to start and grow a business. Moreover, they deserve a system of revenue collection (because that’s what taxes are) that is simple and fair.
In testimony submitted to the House Small Business Committee, WIPP said just that. Citing reports from the IRS National Taxpayer Advocate as well as the Small Business Administration (SBA) Office of Advocacy, the testimony documents what women business owners already know: the tax system is broken, failing under the weight of complexity, uncertainty and outdated policies. But more importantly, the testimony addresses the impact of possible reforms – and the need for any overhaul to be comprehensive.
What does that mean? It means that the idea to lower the corporate tax rate, favored by the White House and some in Congress, must not happen independently of adjusting individual rates in a similar manner. This distinction matters because so many businesses, including almost 9 in 10 women-owned businesses, are structured as “pass-through” entities paying taxes as individuals (including S-Corps, Sole-proprietorships, partnerships, and LLCs).
Corporate-only reforms would be unfair to these businesses – and for that reason WIPP has always supported comprehensive (corporate + individual) reform. The testimony underscored this important point.
In addition, WIPP identified tax policies that, absent major reforms, would benefit women entrepreneurs. This includes making more small business tax credits and deductions permanent. In recent years, these tax “extenders” have been extended (hence their name) at the last minute, or even retroactively – not a good way for business owners to plan their budgets.
WIPP also asked Congress to consider tax credits that benefit new businesses, helping offset the costs of launching a new company. Another policy request was to avoid changing the Employee Stock Ownership Plan (ESOP) provisions in the tax code, as these have proven to be both popular and good tools to incentivize productivity and long-term business health.
In agreement with the idea that simple businesses (sales – costs = income) should have simple taxes, WIPP also supports simplifying the cash accounting method and expanding its optional use to more small businesses. Finally, with healthcare costs an always-growing burden on employers, WIPP continues its support of expanding the Small Business Health Care Tax Credit so more women entrepreneurs minimize the cost of providing healthcare to employees.
More ideas for reforming the tax system to incentivize entrepreneurship and innovation are out there. WIPP will continue working to identify policies that let women business owners focus more on their business and less on complex tax requirements. At the end of the day, all of these decisions should be made with the basic principles of simplicity and fairness in mind. And that’s exactly what we asked Congress to do.