Senator John ThuneThere are many reasons why South Dakota is a great place to live. Friendly people, strong communities, and many opportunities for recreation are just some of the reasons we choose to call South Dakota home, but a reason that may be overlooked sometimes is our state’s way of doing business. In fact, South Dakota is a model that other states and the federal government could look to in moving our economy forward.
Last month, the Small Business and Entrepreneurship Council released a study on the best and worst state tax systems for small business and entrepreneurship. According to that study, South Dakota’s tax system is the friendliest in the nation for small business growth and entrepreneurial innovation. While the unemployment level in our state is higher than it has been in recent years, South Dakota has generally been less hard-hit by the current recession, and our state’s strong small businesses are largely to thank.
South Dakota provides an easy-to-understand example that other states and the federal government should follow to encourage private-sector job creation and greater economic prosperity. South Dakota’s pro-growth tax policies bring businesses to the state, where they create local jobs. Embracing similar policies at the federal level is a simple step toward economic growth across the nation – which underscores the importance of Congress extending the 2001 and 2003 tax cuts that benefit individuals and small businesses across the state. For example, if President Obama’s tax plan is adopted, small business employers of more than 20 million Americans will face higher taxes.
Unfortunately, a number of measures being considered in Congress could be more harmful to small businesses than helpful. The recently enacted health care law imposes new mandates and taxes on small businesses that will likely stunt their growth. Until the new law is fully implemented, businesses face uncertainty about how it will affect them, further slowing the hiring of new workers and the purchasing of new equipment and expansion of facilities.
Efforts to pass a sweeping climate change bill would further handcuff businesses at the worst possible time. New taxes on energy production would result in higher prices for all consumers, families, and businesses alike, while manufacturing and energy related jobs would be sent out of the country. The impact on energy intensive industries like agriculture, manufacturing, and biofuel production would be felt especially hard in South Dakota.
Our nation’s history offers many examples of good policy at the state level setting an example for good policy at the federal level. South Dakota’s policies that promote small business growth offer a guide that the federal government can follow to achieve similar success. Instead of pursuing policies that hinder business development, South Dakota has embraced the importance of small business growth for overall economic development. The federal government in Washington would be wise to follow our state’s example.