NCPA - National Center for Policy Analysis

Behold The Power Of Small Businesses

February 21, 2002

  • Government data show that three out of every four net new jobs are in small businesses.
  • Small firms represent 99.7 percent of all employers -- and they employ 53 percent of the private work force.
  • They are responsible for 47 percent of all sales in the nation -- and are responsible for 51 percent of private sector output.
  • Small businesses are responsible for 55 percent of innovations -- and represent 96 percent of all U.S. exporters.
Given such a strategic role for small businesses in the U.S. economy, a proposal to grant them tax relief in their early years has been suggested as a form of economic stimulus by Investor's Business Daily Chairman William O'Neil.

Specifically, his plan would grant four years of tax relief to any American who started up a business in the next three years. In the first two years, the business would be tax free. In the next two years, the tax would be half the corporate rate.


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