I can't think of a better time to evaluate our nation's environment for entrepreneurship than the National Entrepreneurship Week when we recognize the role of business startups and entrepreneurship in America.
Sadly, entrepreneurship is at a 17-year low. Since 2007, we've seen a 23 percent drop in new-business creation, according to the Bureau of Labor Statistics.
Moreover, an October release of the annual World Bank's Doing Business report found that the United States fell to No. 13 for ease of starting a business, down from third in 2007.
There is no question that America's small businesses are the engines of job creation, considering they employ just over half of the country's private sector work force and create more than half of the nonfarm private gross domestic product. So, with an unemployment rate above 8 percent, we need policies from Washington that will spur small-business growth.
According to the Kaufman Foundation, the top performing 1 percent of businesses create 40 percent of new jobs, and high growth "gazelle" firms (those three to five years old) make up less than 1 percent of all companies, yet generate roughly 10 percent of new jobs in any given year.
There are many contributors to our nation's unemployment crisis and stagnant economy, but one of the main reasons is the uncertainty created by Washington.
To build a stronger economic recovery, we should end any threats of tax increases, address our debt crisis by restoring fiscal discipline, pull back on unnecessary federal regulations, and remove barriers to starting businesses. This is why House Majority Leader Eric Cantor announced several measures this week that will do just that.
Although the House has passed nearly 30 jobs bills that sit idle in the Senate, we will not stop pursuing a pro-growth agenda. Within the next several weeks, the House will bring to the floor the Jumpstart Our Business Startups Act (JOBS).
This legislation is a package of bipartisan measures that have been recommended by the President's Jobs Council. The JOBS Act will afford access to more financing for small businesses and address some of the regulatory burdens that small businesses face.
For example, one significant roadblock to business growth is the initial public offering process. Increased regulation makes IPOs more costly, as the average cost to go public is about $2.5 million, and annual cost to stay public is $1.5 million.
To address these challenges, the JOBS Act will reduce the cost of going public for companies by phasing in certain Securities and Exchange Commission regulations over a five-year period.
This temporary reprieve will allow smaller firms to go public sooner, which directly leads to more job creation within the company. The JOBS Act will also remove a regulatory ban that prevents small businesses from using advertisements to solicit investors.
The bill would also eliminate SEC restrictions that prevent "crowdfunding" so entrepreneurs can raise equity capital from a large pool of small investors.
In addition to bringing the JOBS Act to the floor, the House will pursue legislation that will allow companies with 500 or fewer employees to take a deduction equal to 20 percent of their income before paying the standard tax rates on the remainder. The deduction would also be available to firms that file as individuals, as most small companies do.
As chairman of the Small Business Committee, I hear from small-business owners every week that they are bombarded by more hurdles than ever before.
This latest effort by House Republicans is intended to help our nation's job creators, encourage entrepreneurship and foster an environment that is conducive to small-business growth.
Our nation needs pro-growth policies like never before. I hope President Obama and the Senate will join us.
Rep. Sam Graves is a Missouri Republican and chairman of the House Small Business Committee.
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