President Obama has a message for all the small-business owners in America who also happen to employ more than half of all Americans: "If you've got a business -- you didn't build that. Somebody else made that happen."
Obama uttered that sentence while campaigning in Roanoke last Friday, to explain how government deserves a large share of the credit for businesses' success because it provides basic services and infrastructure that businesses use.
"The Internet didn't get invented on its own," Obama continued. "Government research created the Internet so that all the companies could make money off the Internet." Moreover, Obama did not make this statement to argue that government should invest more in basic research and infrastructure. He was calling for a tax hike to fund more failing solar firms, bullet trains to nowhere and most of all the budget-devouring entitlement programs he lacks the courage to fix. He seems to think successful entrepreneurs should be grateful and eager to pay more.
Only someone who has never signed the front of a paycheck could make such an ignorant comment. Government research may have helped create the Internet, but entrepreneurs made it useful and profitable. And as with most, if not all of the basic infrastructure that modern governments provide, business entrepreneurs have paid for the Internet thousands of times over through the tax revenues they created through increased sales and employment over the years.
Obama repeatedly claims his tax hike proposal will only hit 3 percent of small-business owners. To put his statement in context, the U.S. Census Bureau reports more than three-quarters of small businesses have no employees. (Example: An employed journalist who freelances for pocket money.) The 3 percent of small businesses that Obama wants to squeeze produce more than half of all small-business income and account for a hugely disproportionate share of small-business jobs.
It isn't easy to understand what it takes to create jobs while making money, but Obama has proven himself extraordinarily obtuse on the subject. In just his first three years in office, Obama has approved 106 new major federal regulations that cost the U.S. economy $46 billion annually, according to his own administration's estimate. Under Obama, the per-employee cost of simply complying with federal regulations -- before any other expenses or capital investments are accounted for SEmD has risen from $8,086 in 2008 to $10,585 in 2010, according to the federal Small Business Administration. That number will rise again substantially in 2014, when many firms with more than 50 employees are slapped with stiff fines under Obamacare's "employer responsibility" requirement.
Small businesses already pay the price of big government in more ways than one. Obama should understand if its most successful practitioners are less than thrilled to have him downplay their accomplishments while making the case to raise their taxes.