Linda McMahon, Administrator of the U.S. Small Business Administration (SBA), stopped through Iowa on December 13 as part of her “Ignite Tour” to hear from small businesses across the state and tour several of their facilities. McMahon and Iowa Governor Kim Reynolds began the day with a roundtable with area businesses to discuss a wide range of issues, from business hurdles to accomplishments.
According to Iowa’s Small Business Profile of 2017, produced by the SBA, the state has 266,382 total small businesses (defined as having 500 employees or less), comprising 99.3 percent of Iowa’s business. The total employees employed by small businesses is 641,288, which makes up 48.7 percent of all Iowa employees. These small businesses comprise 82.9 percent of Iowa’s exporters. A total of 14,686 small businesses are owned by minority owners. To see a the full report, click here.
Reynolds told reporters that the most important issue facing small businesses in Iowa is tax reform. She said a priority for her administration in the 2018 legislative session would be a tax cut for small businesses. While she remains “cautiously optimistic” about Congress’ ability to pass tax reform this year, she hopes to be able to release a tax reform plan for Iowa next year at her State of the State address.
“Our tax code is complicated, uncompetitive and we need to do what we can to simplify and lower taxes,” Reynolds said. “We need to take an opportunity to modernize the tax code, to make sure it fits the modern economy, and have Main Street fairness. In addition, we need to make sure that’s it’s financially responsible and sustainable. We need to pass tax reform to help Iowa businesses grow and have the opportunity to add more jobs to our growing communities.”
McMahon is the former CEO of World Wrestling Entertainment, which she grew from a small travelling road show to a billion-dollar international corporation. She often makes the case that she understands the challenges small businesses face as someone who confronted those challenges herself. As head of the SBA, she now advocates for small businesses and oversees the SBA’s loan programs, which help to encourage banks to lend to small companies.
Following her visit, McMahon spoke exclusively with InsideSources to discuss her findings along her Ignite Tour, and her upcoming goals at the SBA. The interview has been edited for clarity.
Since you have taken the position of Administrator, what do you believe are your most significant accomplishments?
Well, I have been on a mission since I came on board last February to make sure that the SBA doesn’t remain the best kept secret in the country. So I’ve utilized, I believe, my marketing background and my promotion background, as well as my CEO, executive, and management background to bring to the SBA some of those opportunities to re-imagine SBA.
It’s a program we’re working on now that will be rolled out Spring of next year, to make sure that our district offices are totally aligned with headquarters, with input from both sides to make sure that we are providing our field offices with the tools that they need to help grow our lenders in the market place, to help grow our research partners like SCORE, women’s business centers, small business development centers, and veterans outreach, because we have so many opportunities to counsel and to mentor small businesses and start ups so that they can be more directly on the path to success.
As you’ve spoken with small business owners across the country, what have they been telling you are their greatest concerns with the current tax code?
Basically, they don’t pick apart the tax code, per se. What they talk about is the opposite–in having a reduction in taxes. They don’t talk so much about tax reform. They talk about tax cuts, and without fail, there hasn’t been one business that I’ve spoken to that has not told me that they would re-invest tax cuts into their business. Whether it was raising wages, hiring new employees, maybe producing more goods and services, looking at alternate sites. Whatever it was, to give them an opportunity to utilize the tax cuts, they would use it to grow their business.
One of the most important provisions of the new tax bill is the change in the pass through rate. Based on your conversations with business owners, and as someone who has grown a small business, how important will that pass through change be to helping small companies expand?
Well, anytime that you are reducing the amount of taxes that you’re going to have to pay, and you get to hold onto more of that money, it’s more money that you have to operate with. And capping the upper rate there at 25 percent would be very helpful to those businesses that might have gone above that in the past. So I think you’re going to see a continued growth with our small businesses.
Having completed a year at the SBA, what future reforms do you want to make going forward to help small businesses?
Well of course the SBA doesn’t make policy. We can only advocate on behalf of the small business around the country that I talk to, and I am following certainly the president’s lead to eliminate overburdensome regulation. I think what small business that I have spoken to, and I’ve visited now with about 500 different small businesses, and participated in business roundtables and touring their companies specifically, is basically they really talk about the volume of overburdensome regulation.
They don’t talk about a particular one so much as the collective number of regulations and how we need to simplify them and how they need to be able to know when they’re in compliance or not, instead of having to read through zillions of pages. You won’t have billions of pages if you eliminate the regulations.
Now, the president has already rolled back over 900 regulations and he clearly, even in government, all of our agencies, we can’t propose a new regulation unless we get rid of two. And he’s also looking in the private sector of a 10-1 rollback on regulation, and so, I think what you’re seeing around the country today, with that enthusiasm, with these statistics that are showing the enthusiasm for small businesses to start or to grow, is because we do have the promise of imminent tax reform. And also, the President has already shown that he will keep to his word and continue to roll back regulations and that’s what small businesses are looking for: the ability to run their business and not to have to spend all their time making sure they’re compliant.