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Main Street Pays $5000 Just to Prepare Taxes

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April 22, 2015

By Bob Coleman
Editor, Coleman Report

I recently interviewed Molly Brogan Day, Vice President of Public Affairs for the National Small Business Association (NSBA) and she gave us a great update about the costs of taxes on small businesses.

Bob Coleman: We’re with Molly Day, the Vice-President of public affairs at the National Small Business Association. First of all, what is the National Small Business Association?

Molly Day: The National Small Business Association, essentially what we are is a government lobbying office for the small businesses who can’t afford to have one in-house. We’re the nation’s first small business advocacy group, we’re headquartered in Washington, D.C. We operate on a non-partisan basis and we really focus on any federal lawmaking or rulemaking process that impacts small businesses.

Bob Coleman: I like what you said. Bipartisan, it seems every year small business is allotted by both parties and then what happens after the election is over?

Molly Day: Yeah, that’s a great point. We’re always in the campaign stuff and then afterwards – unfortunately, a lot of times money talks. A lot of times big businesses have a lot more bank woes than small firms do, so that’s why it’s so important what we do is to say we’re really the voice of small business because we’re a membership organization. Our members tell us what they want, they vote on our priorities and they set us up on our marching orders on the hill and that’s what we do, so our constituents talk to us and we take that message to the hill.

Bob Coleman: What are your constituents telling you today?

Molly Day: I know something that we’re going to talk about a bit is taxes. The reason we did this survey and what they’re telling us is that taxes are really complicated. In fact, the complexity of the administrative burden of taxes is a bigger problem for small businesses than actual financial burden which is really something quite startling and something we’ve heard over the last couple of surveys. So that’s a strong message that we’re trying to take to the hill which is that yeah, the IRS takes a lot of the blame, but they’re not the ones making the loans.

Bob Coleman: Right, we ran the story last week on tax day. It takes the average Main Street entrepreneur two weeks out of his life each year to do these taxes.

Molly Day: That’s right and it costs them about $5,000 just in administrative fees.

That’s before you even pay taxes and that’s really – It’s shocking when you think what a small business owner can do with $5,000.

Bob Coleman: And two weeks out of his or her life as well.

Molly Day: Right, absolutely.

Bob Coleman: Yeah, you mentioned that you are a lobbying effort. If you’re a small business how can they become involved in your organization?

Molly Day: There are a number of ways. The first thing we have coming up is our annual lobbying days, we call it our Washington Presentation. Small businesses by the Washington, D.C., we set up meetings for them with their lawmaker’s offices. We have a White House briefing typically that is usually very well attended. We do a congressional breakfast where we have anywhere between four and seven members of Congress come in, join us for breakfast, spend a few minutes talking to the group and then from those networking opportunities. So it’s a two-day visit to D.C. which in the middle of summer is probably all people want to spend in our lovely capital, but it really gives them a great opportunity to weigh in and say here’s what matters.

Bob Coleman: Molly, the people on this line are lenders. The topic today is hospitality financing. Are lenders, small business lenders, welcome in your group?

Molly Day: Absolutely, absolutely. We have a lot of people, we have a lot of accountants that specialize with the small business work and we’d love to have the lender community join us on our efforts.

Bob Coleman: I love it, I love it. If you did a survey and you rated how small business entrepreneurs are rated, I would imagine that’d be the top of the scale. And I’ve always been fascinated by this disconnect, we’re getting into the election cycle and as you said bipartisan, both Democrats support small business, both Republicans support small business. What is really the problem after the election? I don’t want to get into the weeds about certain topics, but it seems that specifically in terms of SBA financing or regulatory reform or ease of taxation nothing gets done. What is the disconnect?

Molly Day: I think the process and the system itself is really a lot to blame. I think you have lawmakers who are in a constant election cycle, constantly fundraising.

Bob Coleman: Yeah.

Molly Day: I think Washington, D.C. has changed. I don’t think people go out to happy hours together as Republicans and Democrats used to do, so I think there’s a pretty large gap that needs to be bridged, I think that’s the first issue. I think after that is the fact that groups like mine and FIB and the various other small business groups, it’s really an uphill battle to first of all educate folks on what it means to be a small business lender in America today and second of all hold on to those accountable. And that’s really so important, new votes come up that we push for or things that are critical to our small business group.

Bob Coleman: Right.

Molly Day: And some of the technical programs, but we’re really wanting to make sure that these lawmakers are listening to us and voting the way we need them to.

Bob Coleman: Molly, I gave a speech to the Asian American Hotel Owners Association last year and I was saying guys, ladies, you’re running your motels. How would your business look if you received a $65,000 per employee loan and if you could pay it back great, if not don’t worry about it and everybody was ooing and aahing. I said ladies and gentlemen, that’s what General Motors got and so it emphasizes the disconnect between what’s happening for Fortune 500 Wall Street versus Main Street and that’s too bad because Main Street’s where jobs are being created.

Molly Day: They are and unfortunately that’s slowing quite a bit and I think unless we get some of these things in order, whether it’s the tax burden or the regulatory burden, that’s going to cease to be the case. For the first time in decades the rate of startups, new firm startups is slowing, so that it’s not balancing out from shutdowns. So that’s a real serious concern that it’s not just the small business people who are looking for jobs or people who want to live in a nice community. If you don’t have that small business space it’s not going to be a real nice community.

Bob Coleman: Very well said. Molly Day, Vice-President of public affairs, National Small Business Association. Thank you for joining us and let’s talk again, I’d appreciate that.

Molly Day: Thanks, Bob, take care.

Molly Brogan Day is the vice president of public affairs for the National Small Business Association (NSBA) where she oversees all external communications for the organization and serves as the official spokeswoman for NSBA.

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