Imagine for a moment that you are a small-business owner looking to hire a new employee. As tough as the economy has been, you’ve managed to put your firm on track to expand.

Now imagine facing a lawsuit for requiring perhaps one of the most basic qualifications for job applicants – a high school diploma. You don’t have to imagine that last part. It’s now an unfortunate reality thanks to guidance recently issued by the Equal Employment Opportunity Commission.

The “informal discussion letter” states that requiring a high-school diploma as a qualification for employment may violate the Americans with Disabilities Act, which the EEOC enforces. Therefore, an employer must prove a high school education is “job related and consistent with business necessity,” or face potential fines or lawsuits brought under ADA.

Employers should take note. Despite this being an “informal” letter, EEOC investigators and trial lawyers will undoubtedly use this to their advantage. It continues an unfortunate pattern of federal agencies quietly making policy and stepping up enforcement on small businesses for the slightest missteps.

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On Friday I attended an informative business roundtable meeting of Chicago-area small businessmen who came together to discuss how government intervention and its avalanche of regulations are killing jobs and businesses not only in Illinois, but nation wide. Some of the stories were chilling, to say the least. These trials go to show how anti-business the most famously capitalist country in the world has become. No wonder we can’t get out of this second great depression!

The event was held at the headquarters of The Rabine Group in Schaumburg, Illinois. The Rabine Group is a group of nationwide companies that specialize in driveway paving, roofing, and other contracting work. The company is headed by owner and CEO Gary Rabine. Filling out the panel was moderator, Brian Kelly of Bulk Lift International; Gary Rabine, The Rabine Group; Garrett Patten, Patten Industries; Randy Truckenbrodt, Randall Industries, Inc, and Former State Senator Steve Rauschenberger, Rauschenberger Partners.

The panel began with some of the regulatory horror stories experienced by the panel. Each story illustrated how government stands in the way of job creation, small business, and expansion, and how government is not working hand-in-hand with small business but actually fosters an inimical relationship. The panel showed how the oppressiveness of these regulations actually tempts business to break laws just to be able to carry on with business.

Gary Rabine began with his story of how the Illinois Environmental Protection Agency (IEPA) is all too often senseless in its rules. Rabine deals with construction and the waste materials from that work and as a building contractor he brought to the discussion one of these rules that simply makes no sense. Once a construction site is deemed “clean” by the IEPA — that the soil is not contaminated by any chemicals, etc. — there is a rule that all soil carted off a site (for instance from driveways or building foundations) must be tested for contaminants upon leaving the site. Then, that same load must be tested again when it is deposited wherever it ends up being dumped. Remember, this is soil that was already declared “clean” in the first place. So, the IEPA is requiring a contractor to perform expensive environmental tests on the same spoil THREE times! Rabine estimated that it costs upwards to $800 for every load to satisfy this particular regulation.

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From the San Francisco Chronicle:

The owner of Sankofa African Arts and Jewelry said that on the two mornings since protesters returned, her front doorway has reeked of urine.

She said her business has declined by 80 percent since Occupy Oakland began.

“I really, really want them to leave,” said the owner, who gave only her first name, Ellen. She has owned her business for 17 years. “What they are doing is making business worse.”

A camp supporter overheard her lament and shouted: “You would have lost your business anyway with the way the economy is going.”

Ellen burst into tears.

Moji Ghafouri said business has gone down 25 percent at her Caffe Teatro. Protesters also smashed one of her windows.

“I’m a small business,” she said. “If you’re against corporations or big business, I’m not them.”

Ghafouri said part of the problem is City Hall’s doublespeak – like banning people from 10 p.m. to 6 a.m. and then letting people camp overnight anyway.

“If they’re not going to enforce it, don’t say it,” she said.

Meanwhile, one 1%-er is ecstatic:

As the camp grew in size Friday, filmmaker Michael Moore flew in to pump up supporters. (more…)

From Gallup:

Small-business owners in the United States are most likely to say complying with government regulations (22%) is the most important problem facing them today, followed by consumer confidence in the economy (15%) and lack of consumer demand (12%).

Rounding out small-business owners’ top five problems in the Oct. 3-6 Wells Fargo/Gallup Small Business Index poll is lack of credit at 10% and poor leadership by government and the president at 9%.

Looking ahead to 2012, approximately one in three small-business owners say they are very or moderately worried about going out of business.

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From Entrepreneur:

The Occupy Wall Street movement has very different objectives from most small-business owners. Doug Schoen, a political pollster and Fox News analyst, recently surveyed 200 protesters and concluded that the majority of the movement’s members want higher taxes to redistribute wealth and heavier regulation on the private sector. But most small-business owners have been calling for less regulation and lower taxes to get the economy going again.

Moreover, most small-business owners believe in the capitalist system, while Occupy Wall Street expresses some anti-capitalist views. Take a look at some statements made in the movement’s first official release. “Corporations … have continuously sought to strip employees of the right to negotiate for better pay and safer working conditions…. have consistently outsourced labor and used that outsourcing as leverage to cut workers’ health care and pay…. [and] have spent millions of dollars … to get … out of contracts in regards to health insurance.”

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We thought tax reform meant lowering rates and broadening the base by eliminating or cutting back on various deductions, credits, and loopholes. That’s what the Bowles-Simpson commission proposed. That’s what Paul Ryan and David Camp are working on. And that’s the pro-growth model.

But President Obama unveiled a much different tax-reform vision in his much-anticipated debt speech on Wednesday. He would raise tax rates on upper-income earners and small businesses. He also would eliminate deductions and credits, or so called “tax expenditures.” The president referred to these tax-expenditure reductions as “spending cuts.” In his context, they most certainly are not. They are more tax hikes.

Basically, the president is giving successful earners and small-business filers a double tax hike. That’s what it really is.

Of course, the president’s formula of estimating higher revenues to lower the deficit is completely wrong. The reality is that higher tax rates will slow the economy, inhibit new start-up companies, penalize investors, and may very well lose revenues and increase the deficit.

In the latter part of his speech the president did mention some kind of middle-class and corporate tax reform. But he gave no specifics.

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I’ve started more than a dozen small businesses. For one, over $20 million was invested by me and investors who believed in me. I’ve paid payrolls, health insurance, payroll taxes, workers comp, and unemployment insurance for hundreds of employees.

Because of that, my employees were able to pay their mortgages, buy groceries, send their kids to college, and provide for their families. For this same small business, I spent about $50 million dollars on things like advertising, marketing, promotion, lawyers and accountants. That money enriched and employed thousands of others. And, that’s just one small business. Think of the impact that thirty million small business owners have on the U.S. economy. No wonder we create 70% or more of America’s new jobs. Small businessmen and women are a far more powerful economic force than Exxon, Microsoft, GE, or Wal-Mart.

So why do Obama and his socialist cabal hate us? Why do small businessmen and women feel demonized and punished? Why is it Obama’s goal to drive us out of business?

Mug or rob me once? Maybe it’s ignorance or a mistake. Twice? It’s a pattern. But, coming up with ways to rob and destroy me and my businesses on a daily basis? It’s time to get the message. Without a doubt, Obama and the progressive left are the enemy of small business.

Let’s look at the facts.

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The world is backwards. It should be the taxpayers striking in the streets of Wisconsin. But, private sector taxpayers can’t afford to take a day off, let alone a week. Doesn’t that say everything? Only government employees with their powerful unions, lifetime job security, short work-weeks, loads of sick days, nonstop holidays, early retirement, and bloated pensions, can afford to stand in the street protesting. Common sense tells us anyone with this much time to protest and the ability to abandon their work duties, is greatly overpaid.

It’s time for a reality check. These $100,000 per year teachers keep talking about “the kids.” Exactly who is teaching those kids while their teachers abandon their jobs and commit fraud with fake doctor’s notes? If they cared about the kids, they’d be in the classroom. They’d leave the striking and lobbying to their union leaders and lobbyists. It’s the students (and their parents) who should be on strike. Wisconsin teachers are the highest paid in the Midwest, but their students’ performance hasn’t improved. Where’s the taxpayer’s union? Where’s the students’ union? Are students and taxpayers getting their money’s worth? Perhaps they should be on strike.

I’m a small businessman. Like all private sector workers, I have no time to protest or strike. Take a day off? How could I do that? I run a business. People depend on me. I’m on call 24/7/365, weekends, holidays, birthdays and anniversaries. Vacations are “working vacations.” The phones never stop ringing, the emails never slow down. I have to work 16-hour days just to pay my taxes. Who benefits? Those government employees protesting in the streets of Wisconsin.

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The Institute for Justice has been vindicating the rights of entrepreneurs for the last twenty years.

Across the country, IJ has teamed up with casket makers, florists, hairbraiders, horse teeth-floaters, interior designers, sign-hangers, taxi-drivers, trash haulers, vintners and numerous other Americans to secure their basic right to earn an honest living.

This week, we are proud to announce a new, nationwide effort in our fight for economic liberty:  Our National Street Vending Initiative.

From coast to coast, we will team up with mobile food vending entrepreneurs whenever their rights come under attack, filing lawsuits and engaging in grassroots activism and media efforts.

In conjunction with the launch of this initiative, we have filed a major federal lawsuit against the city of El Paso Texas:

For thousands of years, vending has been a way for entrepreneurs to provide for themselves and their families.  In the United States, this ancient trade is more popular than ever.  By 2007, over 760,000 vending businesses were operating in the country.  And consumers love them, so they continue to grow.

The Economist magazine predicted that in 2011 food vendors would create “[t]he biggest shift in America’s culinary landscape” and that “some of the best food Americans eat may come from a food truck.”

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Francis Cianfrocca to discuss what the dead $1.1 Trillion Omnibus spending bill means for small businesses, and what really started the financial crisis.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Democrats drop funding fight, opt for short-term deal
Political Rashomon on Financial Crisis Panel
Financial Crisis Primer: Questions and Answers on the Causes of the Financial Crisis
Why Our Statement Is Not a Dissent or a GOP Report
Financial Crisis Primer

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While the new Congress deliberates over ways to repeal or defund the Obama Administration’s “healthcare reform” law, twenty states and the National Federation of Independent Business (NFIB), have filed suit in federal court arguing that the law is unconstitutional and should be struck down immediately. This is the largest of several legal challenges to Obamacare across the country.

Lawyers for NFIB and the states will appear in a Pensacola, Florida federal court this Thursday, December 16th.  They will ask U.S. District Court Judge Roger Vinson to rule that the heart of the law – and “individual mandate” that obligates private citizens to obtain health insurance whether they want it or not – is unconstitutional.  NFIB and the states will accordingly ask that Judge Vinson to strike down Obamacare in its entirety.

The Constitution does not allow Congress to force Americans to purchase a product solely because they are alive and the federal government’s claim of such authority contradicts more than two hundred years of Supreme Court precedent.  Yet the individual mandate, which would obligate private citizens to obtain health insurance whether they want it or not, does just that.

Counsel for NFIB and the states will make the following arguments:

1) The Individual Mandate in Unconstitutional

Under the Commerce Clause of the U.S. Constitution, Congress has the power to regulate people when they engage in an economic activity that affects interstate commerce.

The Obama Administration argues that choosing not to purchase something (like a health insurance policy) is somehow an “activity” that affects the economy.  The federal government’s theory that a decision to do nothing is “activity” that may be regulated by Congress under the Commerce Clause is unprecedented. The Administration’s lawyers have been unable to identify a single pre-Obamacare decision upholding a law that forces a private individual to enter into a market for goods or services against their will.

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What drives an entrepreneur to start a business?  Is it solely about money?  Or is there something more?  I argue that often it is the  same creative drive that compels an artist to paint, a musician to compose, or a sculptor to look at a piece of rough marble and see an angel inside.  And those who understand the mind of the small business owner know why the proposed tax increase in 2011 will do more harm than good to the very people this economy needs most to create jobs.

On FBN’s Bulls & Bears recently Democratic strategist Jehmu Greene, the token liberal steak tossed into the wolf den of laissez faire commentators, uttered words to the effect that if we allow the Bush tax cuts to remain, the “rich” (I guess that’s me?) will not put the money into the economy but rather just squirrel it away “in their banks…It would not go into job creation or creating capital for small business.”

My first thought  was: “In my bank? Really?  How many businesses have you owned?” (To be fair she did co-found some internet venture called Urban Hang Suite which shuttered in 2003).  But then I reminded myself that, like Ms. Greene herself who has been in non-profit and/or government almost her entire career,  very few people in the  Obama administration, from the president on down, have ever started a business.  Thus they cannot understand what drives entrepreneurs to succeed.  They think it is just about take-home pay.

It’s said that small business owners work eighteen hour days for ourselves so we don’t have to work eight hours a day for someone else.  And often our income on a dollar/hour basis is less than the established firms we may have left to go on our own. Certainly this is generally true for those few scary years at the beginning when a myriad of mistakes are made and unanticipated events occur that prompt the principals to pay ourselves only after all other obligations have been met   So why do it?  Why take such risk?

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Nationwide, government at every level is requiring more and more of the workforce to get its permission just to earn a living.

In the 1950s, only about 5 percent of the workforce needed a government license to do their job. Today, that number is over 30 percent.  And governments impose all kinds of other requirements that make it hard for would-be entrepreneurs to start and grow small businesses.

Entrepreneurs like Chuck, here:

Unemployment in the United States has now topped 9.5 percent for 14 straight months—the longest stretch since the Great Depression.  Nearly 14.8 million people were unemployed last month.

Consider the nation’s capital.

Year after year, Washington, D.C., is ranked the worst place in the United States to start a small business. How can the District change its ways to allow entrepreneurs to create more jobs and opportunity?

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I’m not serious , of course, but it is rather ironic that Raul Castro is cutting the tax burden on small business at the same time that Obama is pushing for higher tax rates on small business.

Reuters reports on the latest in supply-side communism.

Cuba unveiled on Friday a new tax code it said was friendlier for small business, signaling authorities are serious about building a larger private sector within the state-dominated economy. The new system, outlined in the Communist Party daily Granma, greatly increases tax deductions… The tax redesign comes as the government has begun slashing 500,000 workers from state payrolls and preparing to issue 250,000 self-employment licenses to create new jobs in President Raul Castro’s biggest reform since taking office in 2008.

Unfortunately, Obama seems to views tax issues through the prism of class warfare. This video explains why class warfare tax policy is misguided, and it includes the footage from the 2008 campaign where Obama basically said that he didn’t care whether his proposed tax increase on capital gains led to lower revenue.

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By Reps. Marsha Blackburn, Darrell Issa and Peter Roskam:

Last January, President Obama declared, “Jobs must be our number one focus in 2010.”

Since that time, more than 2.5 million Americans have lost their jobs and unemployment stands at 9.6%. Some focus. The President and his Democrat allies in Congress instead chose to unleash a torrent of bills that do anything but create jobs, like the so-called financial services reform bill that didn’t fix the real problem of government meddling in mortgages, and another round of “stimulus” spending that only deepened states’ addiction to Washington bailouts. Last week, Congressional Democrats canceled a vote on tax relief for all Americans until after the November elections, creating more economic uncertainty while delaying private sector job creation.

The primary job killer is the trillion-dollar folly of ObamaCare. The bill hits America’s struggling small businesses and their families with 2,801 pages of new taxes and complicated rules, creating a climate of hyper-regulation and uncertainty that the nation’s most important small business alliance – the National Federation of Independent Businesses –has called “death by a thousand cuts.”

Just a couple of those painful wounds: by 2018, self-employers and small firms will be hit by a $14.3 billion health insurance tax, while a projected $17 billion will be raised by taxing every business-to-business deal over $600. Washington insiders pushing ObamaCare appear to ignore these truths and clearly don’t understand the negative impact the law is already having on entrepreneurs.

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In a hail-mary attempt to garner main street support for Democrats before the elections put an end to the legislative season, President Obama finally was able to push the small business lending bill through the Senate, thanks to two retiring Republicans who crossed the aisle to vote for the stimulus package.

While I don’t believe that this bill is the right way to grow small businesses, and by extension, jobs, I want to let you know some ways that you can take advantage of this bill. Most importantly, keep in mind that much of the money behind this bill is designed to relax credit- reminiscent of banks loosening credit limits leading up to the real estate bubble. Trying to entice businesses into a loan just because it is available is just as bad as having tight credit. Keep that in mind as you consider these options.

Government created incentives for small banks to lend
Financially secure small banks will have access to $30 billion in funds to loan to small businesses. What’s in it for the banks? If they can increase their small business lending by ten percent over the previous year, they will have access to the funds at interest rates near one percent.

Write-offs for startups, long-term investors
The amount that new businesses can invest and consequently write-off will quadruple from $5000 to $20000. Companies who make eligible investments will pay nothing in capital gains taxes on those investments for five years. Businesses can also write-off qualifying business location improvements, property acquisitions, and health care costs for themselves and their families.

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From Robert Samuelson:

Confidence is crucial to stimulating consumer spending and business investment, and Obama constantly subverts confidence. In the past year, he’s undone some of the good of his first months. He loves to pick fights with Wall Street bankers, oil companies, multinational firms, health insurers and others. He thinks that he can separate policies that claim to promote recovery from those that appeal to his liberal “base,” even when the partisan policies raise business costs, stymie job creation or augment uncertainty — and, thereby, undermine recovery. His health care “reform” makes hiring more expensive to employers by mandating insurance coverage. The moratorium on deep-water oil drilling kills jobs; the administration’s estimate of employment loss is up to 12,000.

Obama’s proposal to increase taxes on personal incomes exceeding $250,000 ($200,000 for singles) is the latest example of his delusional approach. It satisfies the liberal itch to “get the rich.” Well, the rich and most other taxpayers will ultimately have to pay higher taxes to help close budget deficits. But not now.

Raising taxes in a weak economy doesn’t make sense.

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The Senate votes this week on a small business tax-break bill which also contains controversial provisions to boost community-bank loans to small business. That is, Washington wants to “nudge” small banks into making loans that they’d otherwise avoid. Kind of like what the government did with home mortgage lending, with results some party poopers might characterize as catastrophic, but hey, who’s paying attention to things like that anyway.

One tries in vain to argue that the answer to recovery is not to artificially stimulate anything, or to overrule prices and rates in the marketplace; those are signals about underlying realities to heed and allow to play out. But beyond that, we must cut regulations that paralyze business and job creation. The starting point is to inventory all the regulations that impact a small business as it grows, and set about rolling them back.

Below is the rough inventory I’ve compiled, but I’m sure it’s out of date and some things have changed. And this doesn’t even address industry-specific rules (see endnote), themselves desperately in need of reform. And it certainly doesn’t address yet-to-come from the new financial reform and Obamacare legislation. I welcome any additions and subtractions.

FEDERAL WORKPLACE REGULATION IMPOSED ON GROWING BUSINESSES* (Draft—Wayne Crews)

ONE EMPLOYEE

• Fair Labor Standards Act (overtime and minimum wage [27% min. wage increase since 1990])
• Social Security matching and deposits
• Medicare, FICA
• Military Selective Service Act (90 days leave for reservists; rehire discharged veterans)
• Equal Pay Act (no sex discrimination in wages)
• Immigration Reform Act (eligibility must be documented)
• Federal Unemployment Tax Act (unemployment compensation)
• Employee Retirement Income Security Act (standards for pension and benefit plans)
• Occupational Safety and Health Act
• Polygraph Protection Act

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After seeing the U.S. economy start to dive during the summer of 2008, Teresa Pershall decided it was time to downsize her business and prepare for the long, tough economic road ahead. She had, after all, seen this type of thing before. In Vietnam. Decades earlier.

In 1980, Teresa — then known by her Vietnamese name, Thi Nquyen — found herself standing in a rice field holding two little babies and asking herself, “What do I do now?” Her only answer at the time was to work. And work hard. Twenty hours a day was not uncommon.

Only a few years earlier, the Viet Cong had taken over South Vietnam and seized her family’s property. Teresa’s husband and many of her family members were able to flee the country, but she remained behind to take care of her two elderly parents and her two babies by herself. Many others she had known simply disappeared after being taken away by armed men from the new regime. She did not want the same to happen to her children and her parents.

Asked to describe what it was like to live under communism, she said, “It’s a really wonderful life for people who work for the government and a really horrible life for those who work outside the government.”

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Julie Murphy is only seven years old, but she embodies the classic American zeal for entrepreneurship.

She learned about lemonade stands after seeing one in a cartoon.  She got excited and wanted to open one of her own.  And so Julie’s mother worked with her to get everything together and set up shop at a fair in Northeast Portland, Oregon.

20 minutes after opening, a government official approached and asked for their $120 occupational license.  Of course, they had no license.

And so 7-year-old Julie, the budding entrepreneur, was told to shut down her lemonade stand or face $500 in fines.

Julie and her mother were encouraged by others to keep the stand open and ask for donations instead.  Business picked up, and the regulators returned.  This time they made Julie cry.  They also got their wish:  Julie’s mom shut down the lemonade stand.

Unfortunately, this is not an isolated case of licensing gone wild.  Rather it is a classic example of a national problem that affects countless people in America every day.  Institute for Justice President Chip Mellor wrote this week in the Washington Times:

Mired in a nationwide jobless recovery, state and local governments have the power to create jobs and transform communities if they do one simple thing: Get out of the way of aspiring entrepreneurs.

Unfortunately for small businesses, however, laws restricting economic liberty are becoming more commonplace in America. Consider that since the 1950s, the percentage of occupations in the United States that require people to obtain permission from the government in the form of a license before they can pursue their chosen occupation has grown from a mere 5 percent to more than 30 percent.

Consider a few recent IJ cases:

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