Fiscal Cliff: Working Minorities and Entrepreneurs Focus on Investments
Alton Drew | 12/31/2012, 9:14 a.m.
Listening to President Obama and the Congress over the past few months tug at the steering wheel while the van heads toward the fiscal cliff, I can't help but wonder if their social policy agenda does not include"The Black Enterprise Bunch"; those black and Hispanic Americans who work, run their own businesses, and invest in other areas besides a house with a lawn and a white picket fence.
The progress report delivered by Mr. Obama last Friday gave me no further hope that anything of significance would result from budget talks with the House and Senate leadership. Mr. Obama left his apparent major social policy goal, a nation where everyone pays their fair share in taxes and other burdens, essentially intact and has not wavered from tax policy that calls for raising tax rates on the wealthy as the means for getting there.
In comments about the fiscal cliff, leadership in the Congress echoed his social and public policy sentiments. House Assistant Minority Leader James Clyburn, Democrat of South Carolina, has emphasized the unfairness of asking Medicare, Medicaid, and Social Security benefits recipients to bear the burden of extended tax cuts for the wealthy. House Financial Services committee member Maxine Waters, Democrat of California, and the committee's future ranking member has reiterated that tax fairness should be the policy to fund the government's responsibility for delivering services. Americans, according to Ms. Waters, want all people to pay their fair share and closing loop holes should not be enough.
But while the political rhetoric emphasizes how pots of entitlements should be maintained, whether in the form of social welfare benefits for the poor or tax benefits for the well off, the discussion has not fleshed out social policy for the investor, business owner, or entrepreneur; those who leverage capital, whether self-financed or obtained by borrowing funds, in order to generate income. In short, growth has never been given primary consideration by Democrats or Republicans during the debate, and in order for entrepreneurs and business owners to experience growth in their businesses, the social policy of national economic growth and the appropriate tools that bring it about must always be at the top of the discussion.
Political leadership appears to ignore that, according to the U.S. Department of Labor, 53.2% of Black Americans and 59.5% of Hispanic Americans are employed. As of 2011, approximately 29.2% of Black Americans and 19.5% of Hispanic Americans are employed in management, professional, or related occupations, according to the Bureau of Labor Statistics.
Black and Hispanic Americans are also business owners. The United States Bureau of the Census reported that in 2007, there were 1,921,907 Black-owned firms in the United States generating $137 billion in revenues. Hispanics owned 2,259,857 firms in the United States, generating $345 billion in revenues.
These business owners also hire people. The Census Bureau reported that Black-owned firms employed 920,198 workers in 2007 while Hispanic-owned firms employed 1,935,688 workers. The question is, how does a social policy goal of ensuring Medicaid, Medicare, and Social Security are maintained as we know it via a tax policy that taxes people at a certain wealth level promote economic growth millions of minority owned firms that employ millions of people?
The answer is, it doesn't, with the possible exception of extending the Bush tax cuts for individual households and businesses. Tax cuts for the middle class and small businesses will encourage more spending, the type of consumer spending that spurs demand for goods and services produced by these very minority firms. Fiscal action that encourages derived consumer demand should be the only focus in Washington over the next forty-eight hours.
Hopefully someone in Washington will have the maturity to say, "Hey, someone hit the brakes and everyone else get your hands off of the steering wheel."