Choking out small business

Published 10:04 pm Wednesday, October 23, 2019

By Ross Reitz

Even though I was biology major in college, the most eye-opening class I took was “Medieval Civilization.” Medieval history starts with the fall of the Roman Empire, so the first thing we studied was how an empire that stretched from England to Iran disintegrated. The answer: low taxes and deregulation destroyed small farmers and businesses.

At first, this seems impossible. Most business owners would support government deregulation and lower taxes. So how can that destroy them and bring down a nation?

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The Romans didn’t have an IRS like we do. They hired independent tax collectors, like Zacchaeus in the Bible. As long as Rome got its money, it didn’t care if the tax collectors overcharged the people and pocketed the extra. Tax collectors found it easier to lean on the poor and working class, so they targeted small businesses and farmers. As the smaller farmers became poorer, they sold their land rights to large plantation and large business owners. As Rome pulled back taxes on the rich, the rich could control prices until small businesses and farmers could not compete. Eventually, the large plantation owners became strong enough that they kicked out the government entirely. The lords and ladies became the authoritarian government over the people whose land and business they had bought. Then, they could raise taxes as high as they wanted on their people. The rich began to block any education for the poor. The small business owners and farmers were punished or killed for speaking against the rich.

On the surface, it feels like pulling back taxes and deregulating business allows business to grow. The problem is that deregulation usually allows big business to grow more than small business. Eventually, big businesses — with more resources — can lower prices or offer services that make small businesses unable to compete. We see in our own community how our small businesses are struggling, even when economic indicators tell us the economy is good.

So, how do we let small businesses and small farmers breathe again?

First, we make sure that we regulate big businesses and make the super-rich pay their fair share of taxes. Tax breaks are meant to spur the economy, but many of them only help the top 1-2 percent of Americans — not small business owners.

Second, we give small business owners a chance to keep good employees. Many employees leave small businesses because someone in their family needs health insurance. Small business may not be able to afford comprehensive insurance. A solution, such as Medicare for all, would eliminate some of the draws to bigger corporations and allow small businesses to retain good workers — as well as free up people from some of the economic fears of starting their own business.

Third, we limit debt. Right now, our country borrows about $1,000,000,000,000 a year because we reduced our government income from taxes. We are at a place where we want negative interest rates — in short, we want to punish small, local banks if they don’t offer risky loans to people who may never be able to pay them back. Small banks were one of the few things that kept the U.S. economy solvent in the last recession. Now “deregulation” wants to regulate them into perilous situations — at the same time our country would face an unprecedented economic crisis if we were not able to continue to borrow money at this unheard of pace.

Throughout the law God wrote in the first five books of the Bible, He repeatedly put in laws to equalize wealth. By equalizing resources and allowing smaller businesses and farmers a chance to make it, God’s plan encourages industry and reduces the risk of bankruptcy and insolvency. But to follow God’s economic plan, we will have to abandon our ideas of extreme deregulation.

Ross Reitz has been a Suffolk resident since 2009. Prior to that, he taught the Bible in Africa for two years and spent six years as a teacher at a Christian school in Philadelphia, Pa.