Posted: Mar 27, 2013 8:49 PM by MTN News
MISSOULA - While corporate CEOs are pressuring Congress to cut Social Security and Medicare as part of a so-called "Grand Bargain" to reduce the debt, Montana small business owners say that cuts to Social Security and Medicare would be devastating to small businesses across the state.
On March 27, 2013, the Montana Small Business Alliance released a new report from the Main Street Alliance and Social Security Works, Business is (Baby) Booming, analyzing the important role Social Security and Medicare play in Montana's economy, both strengthening the retirement security of small business owners themselves, and fueling consumer demand on Main
Analyzing the U.S. Census Bureau's first-ever public use microdata sample from a nationwide survey of business owners , the report found that over one-third (37%) of Montana's small business owners are over age 55, at or approaching retirement age.
Small business owners are significantly less likely to hold retirement assets than private sector wage and salary workers, and the recession has weakened retirement security for many small businesses, including more than half of business owners for whom a majority of their nest egg is tied to their business.
"I'm counting on the benefits I've earned through Social Security and Medicare for my retirement," said Tim Christensen owner of Vino Per Tutti in Bozeman. "We've put all of our savings into our business. If Congress cuts Social Security and Medicare, I don't know how I'll be able to afford
In addition to undermining the retirement security of small business owners themselves, cuts to Social Security and Medicare would hurt small businesses at the cash register by weakening the economy and depressing consumer demand, according to the report.
Even a 3-percent cut in Social Security benefits would take $72.1 million out of Montana's economy. A similar cut to Medicare, meanwhile, would cost Montana's economy $37.4 million.
In Montana's rural communities, Social Security and Medicare are even more important to the small business customer base:
· 20.3 percent of rural Montanans receive Social Security, compared with 18 percent of Montanans in non-rural communities.
· 7.4 percent ($1.6 billion) of total personal income in Montana's 52 rural counties came from Social Security, vs. 6.1 percent ($799 million) in the state's four non-rural counties.
"Cutting Social Security and Medicare would take money out of the economy and out of our customers' pockets," said Clare Kemp, owner of Bella Boutique in Hamilton. "What small business owners need most right now is more customers, not cutbacks."
Instead of cutting Social Security and Medicare, small business owners say Congress should close tax loopholes and crack down on offshore tax abuse that allows the wealthy and corporations to avoid more than $100 billion in U.S. taxes per year by sheltering their income in offshore tax havens.
"When the wealthy and large corporations avoid their tax responsibility by using offshore tax havens, it robs the country of the resources we need to rebuild the economy, create jobs, and support small businesses and our customers," said Kemp. "To support small businesses, Congress should cut offshore tax loopholes, not Social Security and Medicare.
The Montana Small Business Alliance is a statewide network of local, independent small business owners across Montana.We know small businesses are the backbone of our economy and of local communities across Montana.
But too often, small businesses are spoken for by big corporate interests that don't have the best interests of real small businesses at heart. Small business owners in the Montana Small Business Alliance are changing that by speaking for ourselves on issues that matter to our businesses and our communities.