January 1997

A new survey of businesses with fewer than 10 employees commissioned by the National Association for the Self-Employed shows that these businesses are split evenly as to whether the top priority of the 105th Congress should be to balance the federal budget or cut taxes. But the survey also showed that the majority of these small businesses believe it's possible to do both.

As legislators convened for the opening sessions of the 105th Congress, the NASE polled 500 small business owners about the legislative agenda they'd like to see. The poll also queried respondents as to how they voted in the recent elections.

When respondents were asked to decide between three major areas that Congress should focus on, 42 percent listed "cutting taxes" as their top priority, while 40 percent favored "balancing the federal budget." Another 15 percent selected "reducing the regulatory burden" as the top priority for the new Congress.

In a related question, however, two-thirds (66 percent) of respondents said they thought it was possible to balance the budget and reduce taxes at the same time. Only 25 percent responded that thought doing both wasn't possible.

"It's not surprising to NASE at all that tax reform continues to be a top concern for small business," says NASE President Bennie L. Thayer. "There's still plenty of work to be done to improve the small business environment -- small businesses need full deductibility of health insurance, the home office deduction, estate tax reform. And we're optimistic that Congress and the president seem willing to bring tax issues to the table as as priority."

When it came to the tax reforms most strongly supported by small businesses, NASE's survey revealed that the majority (57 percent) favored "reducing personal income tax rates." Meanwhile, 18 percent said they would most strongly support "reducing capital gains income tax rates." Another 15 percent favored federal estate tax reductions, and just 5 percent said they most strongly supported a reduction in corporate tax rates.

Beyond tax issues, those surveyed were asked to prioritize a list of five other major issues facing the 105th Congress. The issues that most deserved attention, respondents said, were health care reform (48 percent), followed by Social Security reform (25 percent), campaign finance reform (10 percent), tort or legal reform (7 percent) and Medicare (6 percent).

NASE's survey also polled small business owners as to how they voted in the most recent election, and results showed that small business vote roughly paralleled that of the general population. On the Congressional ballot, Republicans enjoyed a 4 percent advantage over their Democrat opponents (52 percent to 48 percent) from voting small business owners.

A few of the poll's other findings:

• Neither party can take solace in the survey finding that by a 3-to-1 margin (63 percent to 20 percent) small business owners think their member of Congress works more for the interests of big business than for the interest of small business.
• A self-directed Social Security plan enjoyed broad support from small business owners, as 65 percent of respondents said they would support a plan that would allow for private investing of a portion of social security funds. Forty-two percent strongly support such a plan, while 29 percent would oppose the measure.
• Fifty percent of small businesses polled said that the Small Business Administration is an effective advocate for them. However, nearly one-third of respondents (31 percent) do not believe the SBA is an effective advocate for them. At the same time, by nearly a 4-to-1 margin (65 percent to 17 percent), small business owners said they think that the federal government hinders rather than helps them.

This survey of 500 small business owners nationwide was conducted Jan. 7-9, 1997 by the Small Business Research Institute, a nonpartisan survey research firm based in Washington. Results have a margin of error of +4.4 percent. "Small business," for the purpose of this survey, refers to business enterprises with fewer than 10 employees.

Go to survey results.

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