SBE Council's "Business Tax Index" Ranks State Tax Systems

Today, the Small Business & Entrepreneurship Council (SBE Council) published the "Business Tax Index 2012: Best to Worst State Tax Systems for Entrepreneurship and Small Business." The index ranks the 50 states and District of Columbia according to the costs of their tax systems for entrepreneurship and small business.

(To view the interactive U.S. map with each state ranking, please click here.)

Raymond J. Keating, chief economist for SBE Council and author of the report, said: "While 'Tax Day' 2012 is officially April 17, it is critical to understand that federal, state and local taxes are a burden on entrepreneurs, investors and the economy throughout the year."

Keating added: "All taxes matter, whether imposed at the federal, state or local level of government. They matter to consumers, entrepreneurs, investors and businesses. State and local levies matter in terms of a state's competitiveness. And they matter when it comes to economic growth and job creation."

SBE Council's "Business Tax Index 2012" pulls together 18 different tax measures, and combines those into one tax score that allows the 50 states and District of Columbia to be compared. Among the taxes included are income, capital gains, property, death/inheritance, unemployment, and various consumption-based taxes, including state gas and diesel levies.

According to the "Business Tax Index 2012," the 15 best tax systems are: 1) South Dakota, 2) Texas, 3) Nevada, 4) Wyoming, 5) Washington, 6) Florida, 7) Alaska, 8)Alabama, 9) Ohio, 10) Colorado, 11) Mississippi, 12) Michigan, 13) South Carolina, 14) Tennessee, and 15) Missouri.

The 15 worst state tax systems are: 37) Nebraska, 38) North Carolina, 39) Illinois, 40) Oregon, 41) Rhode Island, 42) Connecticut, 43) Hawaii, 44) Vermont, 45) California, 46) Maine, 47) Iowa, 48) New York, 49) New Jersey, 50) Minnesota, and 51) District of Columbia.

In terms of recent policy changes, it's worth noting that some states have made steps forward on providing some tax relief, such as Indiana, Arizona, Maine, Michigan, North Dakota, Delaware, Oklahoma, along with Ohio. In contrast, other policymakers worked against entrepreneurship by making state taxes less competitive, such as Oregon, Connecticut, Illinois and New York.

"Modest to Moderate" Growth Not Good Enough

After four-plus years of a deep recession and poor recovery, some can get excited when the economy merely muddles along at a below-average rate of growth.

That seems to be the case with some in their reaction to the release of the Federal Reserve’s Beige Book on April 11. The information gathered from the Fed’s 12 regional banks pointed to the economy from mid-February through late March continuing to grow “at a modest to moderate pace.”

During periods of recovery, real GDP growth should be expanding robustly. Based on post-World War II history, real GDP should be growing in the 4.5% range. Overall, including recessions, the economy should be growing at better than 3%. Unfortunately, since the recovery began in mid-2009, real GDP growth has averaged a mere 2.5%.

From 2008 to 2011, real annual GDP grew by only 1.2%.

The same pretty much goes for job creation. It was reported in the Fed Beige Book: “Hiring was steady or showed a modest increase across many Districts.”

Again, the job creation numbers have been inconsistent and underwhelming during this recovery. As of March, according to the household survey, employment was still 4.6 million below its peak in November 2007. That just over four years and four months!

The problem with our economy has been and continues to be policy.

On the fiscal side, it’s about federal spending careening out of control, and tax increases, scheduled tax increases and the threat of even more taxes. It’s about hyper-regulation, including on the finance, health care and energy fronts.

But it does not stop there. It’s also about misguided monetary policy in place since the late summer 2008. The Fed has been focused on trying to use monetary policy to gin up the economy, which never works. Instead, it creates uncertainty and concerns over higher inflation. The value of the dollar suffers accordingly, and energy prices, particularly the price of oil and therefore gasoline costs, rise as well.

For good measure, with interest rates purposefully pushed so low by the Fed, banks actually have real concerns about lending money since rates inevitably are going to rise, especially when inflation accelerates. Banks would then be in the position of having long term loans at extremely low rates, and having to pay higher interest rates to pull in capital. That doesn’t work.

Modest to moderate economic growth simply does not cut it. The American people need far better. Indeed, they cannot afford to settle for less than what we should be experiencing, that is, robust growth with solid job creation. But that will require a shift in policy to lower taxes, smaller government, deregulation, and monetary policy exclusively focused on price stability. Indeed, if we do not get a dramatic policy change, it’s doubtful that “modest to moderate” will even be sustained.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is “Chuck” vs. the Business World: Business Tips on TV.

SBE Council Economist on Latest Inflation Numbers

Raymond J. Keating, chief economist for the Small Business & Entrepreneurship Council (SBE Council), offered the following statement in reaction to the CPI inflation numbers released this morning by the U.S. Bureau of Labor Statistics:

"Inflation heated up again over the past three months. No one should be surprised.

"CPI increased at 0.2% in January, 0.4% in February, and 0.3% in March. At an annualized rate then, inflation over the past three months registered 3.6%. Keep in mind that, but for a three-month break, CPI inflation has been running hot since December 2010.

"That's not surprising because the Federal Reserve opened the monetary floodgates in late summer 2008, only taking very minor breathers along the way, and in the end, inflation always is a monetary phenomenon.

"Looking ahead, any further improvement in the economy could work to further unleash the inflation rooted in looseFed policy. None of this, though, is necessary. Instead, it's merely bad policymaking. If the Federal Reserve would simply get refocused on price stability, then we would experience benefits in terms of certainty, growth and inflation."

Trade and the Economic Roller Coaster

February’s trade data continues to highlight the reality that we are all on an economic roller coaster, going up and down without getting ahead.

On exports, after growing from January to September last year, they were down in October and November. Growth resumed – albeit slow growth – in December and January. But in February, exports effectively experienced no growth compared to January. In fact, February exports stood at the same level as they were in September.

Given the economic troubles and concerns elsewhere, such as Europe, Japan, China, and Canada (some slowing), perhaps we should not be surprised about the lack of U.S. export growth.

But the bigger part of the trade story in February was the large drop in imports, with a decline of 2.7 percent.

Even more so than exports, it was an up-and-down story on a month-to-month basis when it came to imports in 2011. That bouncing-ball scenario has now continued into 2012, with January imports up and February imports down.

It is important to keep in mind that despite what’s being reported in the media, falling imports are not a positive for GDP growth. To the contrary, falling imports reflect a sluggish domestic economy that is experiencing poor consumer spending and/or capital spending.

Despite all of this, some still point to the decline in the trade deficit in February as an economic plus. Not only do the underlying numbers tell a different story, but a declining trade deficit usually comes with a slowing or recessionary economy. We saw that in 2008 and 2009, for example, and it makes sense when you understand the size of the U.S. economy and how imports tie back to domestic economic growth.

In recent times, trade has been critical to U.S. economic growth. The roller coaster to nowhere largely reflects the reality and continuing concerns about the overall economy. Rather than experiencing the robust growth we should during an economic recovery, we’re either inching ahead or simply running in place.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is “Chuck” vs. the Business World: Business Tips on TV.

The Value of IP to the U.S. Economy

Protection of intellectual property (IP) is essential to innovation, investment, U.S. competitiveness and entrepreneurship. SBE Council continues to remind policy makers and elected officials about this reality, as well as the importance of IP to America's small businesses. IP protection must remain a top priority for our government, and a new report released on April 11 shows why this is important.

The U.S. Commerce Department released the new study, which finds that millions of American jobs are tied to the robust use of IP. The new report -- "Intellectual Property and the U.S. Economy: Industries in Focus" -- examines 75 IP-intensive industries that together directly and indirectly employed 40 million workers with average weekly wages that are 42% higher than those of non-IP-intensive industries. IP-intensive industries accounted for $5.0 trillion in value added, representing 35.5% of U.S. gross domestic product in 2009. Additionally, in 2010, merchandise exports of IP-intensive industries totaled $775 billion, equating to 60.7% of total U.S. merchandise exports.

“If we’re going to continue to be the most innovative economy on Earth, we must ensure that American IP-intensive industries remain confident that their copyrights, patents, and trademarks will be enforced,” said U.S. Chamber of Commerce President & CEO Tom Donohue at an event where the report was unveiled. “The Commerce Department’s new study demonstrates that 40 million jobs also hinge on the proper and adequate enforcement of IP rights, which are frequently threatened by criminal organizations overseas. It’s a challenge we must tackle together.”

Particularly for small firms that lack the resources to fight or track IP theft, the government's role in combating such theft is critical. The U.S. government can also play a lead role in helping to build a cultural respect for IP around the world. After all, global theft of American IP destroys jobs and hurts U.S. investment and economic growth, which in the end hurts global economic growth and prosperity as well.

Karen Kerrigan, President & CEO

POTUS vs SCOTUS on Affordable Care Act?

Apparently, President Barack Obama did not like how the arguments over his massive health care measure went before the U.S. Supreme Court. On April 2, he not only came out swinging against the Court, but questioned the Supreme Court's role in our system of checks and balances. It was an unprecedented attack from a president of the United States.

For good measure, Mr. Obama, who taught classes in constitutional law, either misled people or proved that he fails to understand what judicial activism is.

On challenging the Court's role, Obama argued that the Court should "not take what would be an unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a democratically elected Congress."

Was the President serious here or is this just a case of playing politics? Either way, it's quite troubling.

Of course, there is nothing "unprecedented" or "extraordinary" about the Supreme Court having to take the step of "overturning a law" when that law flies in the face of the Constitution. After all, the Supreme Court's job is to make sure that laws do not cross the line and violate the Constitution. This was made clear by the Founding Fathers, and in the 1803 Marbury v. Madison decision.

Given that serious responsibility, even if a law were passed by significant majorities, that would not influence or affect the Court's responsibility. But large majorities most certainly were not the case with ObamaCare. The President declared that his health care measure "was passed by a strong majority of a democratically elected Congress." This is another troubling declaration.

Again, is the President misleading for political purposes, or has he talked himself into something that does not align with reality? ObamaCare just got enough votes to avoid a filibuster in the Senate (60 votes), and squeaked by in the House of Representatives by a margin of 219-212, without any Republican support.

So, Mr. Obama got the history of his own health care law wrong, and served up a disturbing assessment of what the proper role of the Supreme Court is.

But there was more distortion when it comes to the Court's role and judicial philosophy. President Obama said, "And I'd just remind conservative commentators that, for years, what we have heard is, the biggest problem on the bench was judicial activism, or a lack of judicial restraint, that an unelected group of people would somehow overturn a duly constituted and passed law."

Well, the President is correct that judicial activism, or a lack of judicial restraint, has been the biggest problem on the bench. But judicial activism is not about the Court overturning a law when that law is unconstitutional. Rather, judicial activism is when the Court decides to take on the role of constitutional author and/or legislator. That is, rather than following and properly applying the Constitution, judicial activists decide to ignore what the Constitution actually says and replace it with their own preferences. They decide to rewrite the Constitution as they see fit. This is where the unelected seek to take on the job of elected lawmakers, which is completely inappropriate.

For example, judicial activism was on full, unsavory display in the Court's 5-4 decision in the Kelo v. City of New London eminent domain case, when the Court redefined "public use," as written in the Constitution, to mean public purpose, and then allowing politicians to define public purpose however they like.

In the end, President Obama did not like the signals that were being sent by justices during the arguments over ObamaCare, in particular, that the individual mandate represents an unprecedented, sweeping and constitutionally groundless expansion of federal government powers. His responses amounted to a political fit, in which he said things that undermined his own reputation. The President seems to be laying the groundwork for accusing the U.S. Supreme Court for playing politics with ObamaCare during his reelection campaign. But if the Court overturns ObamaCare on true constitutional grounds, that is not politics. Instead, it is our government's checks and balances working as they should.

It was bad enough that President Obama pushed a costly, damaging health care measure through Congress that makes no economic sense, but now he is levying unwarranted attacks on the Supreme Court as it considers serious questions about the law as it pertains to the U.S. Constitution. Shame on the President.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.

A Pro-Drilling Turn for President Obama?

It's an election year, prices at the gas pump are up, and the Obama administration has a track record of being hostile to almost all efforts to expand energy exploration and production at home. That, of course, can make for a rough road to reelection.

What to do?

Well, start ramping up the rhetoric to get people to ignore the facts, and instead believe that the administration is doing as much as it possibly can on the energy front. Tossing in an item or two that seems to go against type always helps as well.

Along those line, the U.S. Department of the Interior recent announcement about possibly allowing seismic surveys off part of the East Coast in 2013 amounts to nothing more than additional delaying tactics. In reality, the Ob`ma administration has eliminated any possibility of energy development off the Atlantic Coast until after a second four years of an Obama administration, if the President were to win reelection in November.

On April 2 came another announcement by the Interior Department, which asserted that the process for drilling on public lands would be accelerated under a new process, dropping the time period from 298 days to 60 days or less, according to an Associated Press report. The new procedures would be in effect by May 2013.

But doubts and problems remain. For example, as AP also reported, "Ron Ness, president of the North Dakota Petroleum Council, which represents more than 200 companies working in the state, said the permitting process on federal land is overly burdensome and agencies are understaffed at present to deal with the rise in oil production in North Dakota and elsewhere. Ness said streamlining the permit process on federal land is welcome, ‘but proof is in the pudding.'"

Others voiced what might be called cautious optimism. Erik Milito, upstream director of API, explained, "Today's announcement sounds promising but we would suggest additional reforms are needed. We support any system that will ensure efficiency and a clear, consistent application process. Most important, the administration needs to streamline the multi-year timeframe for environmental reviews and open additional areas for responsible energy development."

A January 2012 study by EIS Solutions, done for API, found, "The decline in oil and gas leasing, permitting, and new drilling on the nation's public lands since 2009 have come at a high cost to America - namely, a significant loss of domestically produced oil and natural gas, thousands of jobs in the energy-rich western United States, and the forfeit of hundreds of millions of dollars in state and federal tax revenues, royalties, and lease payments to western states and the U.S. Treasury."

After taking into consideration the economic downturn and the trend in development on private lands, the study points out: "These facts strongly suggest that the downturn in oil and natural gas activity on the nation's federal lands is due to something beyond the nation's difficult economic circumstances. A host of new rules, policies and administrative actions that are not conducive to oil and natural gas production on federal land are a culprit. The slowdown in new leases, permits and wells drilled on BLM lands is, in real part attributable to the direction of current federal land energy policy."

The Obama administration seems to want to have it both ways. The White House has danced to the anti-carbon-based-energy tunes being played by green extremists, while trying to disguise the realities of such wrongheaded policies with token changes and some political rhetoric.

However, President Obama's core hostility to energy development cannot be hidden. It seems he simply cannot help himself. For example, in a March 29 speech, the President declared, "Today, members of Congress have a simple choice to make: They can stand with the big oil companies, or they can stand with the American people."

That, of course, is an absurd statement based on the economic reality that oil firms need to work to meet consumer demand for energy. But the statement is not just about politics, either. It seems to be another reflection of the anti-business, anti-energy beliefs held deeply by this president.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.

Regulations and the FCC: A Commissioner's Wisdom

To be generous, it's rare when a regulator understands the ills of regulation.

But that is the case with FCC Commissioner Robert McDowell. His job is, in essence, to be a regulator. Yet, he possesses a strong understanding of both the economics and the history of regulation gone awry.

McDowell was on Capitol Hill on March 19 testifying before the House Subcommittee on Financial Services and General Government. And part of his testimony focused on spectrum policy, given that Congress passed legislation in February that puts television broadcast spectrum up for auction. There has been considerable debate over how this auction should be handled, with some advocating that the FCC micro manage the auction by effectively picking winners and losers.

McDowell countered such regulatory activism in his testimony. He stated:

"Meanwhile, a debate continues over whether or how the FCC should shape the outcome of this process. History has proven that regulators' attempts to over-engineer spectrum auctions often result in harmful, unintended consequences. Thus, I hope all of us can apply the lessons learned from the Commission's past missteps as we implement this new legislation. I am committed to working with my colleagues to ensure that our auction rules are minimal and ‘future proof,' allowing for flexible uses in the years to come as technology and markets change... I am confident that the FCC can get it right this time. And ‘getting it right' means avoiding regulatory hubris by keeping the government's hands off of the marketplace's steering wheel as much as possible."

McDowell correctly notes that regulation has consequences, and those often include consequences of the unintended variety. Especially in an industry so dynamic and innovative as telecommunications, there is simply no way for regulators to understand where the market might be headed, and therefore, it would be dangerous, not to mention arrogant, for the FCC to dictate where spectrum should be allocated, as opposed to leaving resource allocation to the market which ultimately is guided by consumers.

It is worth noting that in late March, the House voted by a 247-174 margin to reform the FCC. In a letter of support sent to the House on the Federal Communications Commission Process Reform Act (H.R. 3309), SBE Council President and CEO Karen Kerrigan explained: "H.R. 3309 would bring greater transparency, consistency and effectiveness to the FCC's regulatory process. For example, it would establish and clarify procedures for when the FCC issues rulemaking notices, including citing the FCC's authority for adopting and amending a rule. Also, the economic impact of a rulemaking would need to be considered, with the FCC required to assess the presumed market failure and consumer harm, the governmental failures warranting FCC action, as well as the burden of existing regulation. For good measure, it would have to be determined that the benefits justify the costs of new regulatory action. In addition, H.R. 3309 would establish greater openness when it comes to the Commission's deliberations, agenda, meetings, and dissemination of information."

Unfortunately, the Senate appears uninterested in dealing with this legislation, while the White House stands opposed. In addition, while efforts were made to set limits on the FCC's regulatory discretion on spectrum auctions in the bill passed in February, that effort also was denied and excluded by the Senate.

So, we are left hoping that Commissioner McDowell's view prevails at the FCC, and that his optimism that the FCC will get it right is well placed.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.

IPOs on the Upswing?

In good times or bad, getting access to the capital needed for growth stands as a huge challenge for entrepreneurs.

On April 2, the National Venture Capital Association and Thomson Reuters pointed to some life in the first quarter of this year when it comes to venture-backed initial public offerings.

Specifically, it was reported: "There were 19 venture-backed IPOs valued at $1.5 billion in the first quarter of 2012, which represented a 10 percent increase in dollar value and a 36 percent increase in volume compared to the first quarter of 2011."

The volatility in venture-backed IPOs in recent years has been notable. In 2006, for example, there were 57 such IPOs, followed by 87 in 2007. They then plummeted to 6 in all of 2008 and 12 in 2009. The number rose to 74 in 2010, and then declined back to 53 last year.

If the momentum from the strong first quarter showing - which came after a recent low of five in the third quarter of 2011 and 12 in the fourth quarter - follows through for the rest of the year, that would be a clear plus for the economy.

Of course, the considerable uncertainty swirling around the election, and how a variety of tax issues will eventually come out, have to serve as dampening effects on such activity.

Although, it is worth highlighting a policy point made by Mark Heesen, president of the NVCA. He observed: "The recently passed JOBS Act will grant emerging growth companies temporary but significant regulatory relief during the IPO process, allowing them to focus on accessing capital to grow their businesses."

Clearing away threats of increased tax and regulatory burdens - including the possibility of higher capital gains taxes - would be a plus for the venture capital and IPO marketplaces. In contrast, imposing higher taxes would raise costs and restrain investment activity.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.

Bipartisan Group of Senate Small Business Committee Members Urge FTC to Support the States in Fighting IP Theft

Sixteen U.S. Senators who sit on the Committee on Small Business and Entrepreneurship sent a letter to the Federal Trade Commission (FTC) on April 2, which urged commission members to support efforts and calls by the states to combat IP theft.

In the letter, the bipartisan group of Senators wrote: “We are writing to you to ask you to consider a request submitted by the National Association of Attorneys General (NAAG) to use all the tools at your disposal to fight the theft and use of stolen American manufacturing information technology (IT) and intellectual property (IP).” SBE Council shares the concerns of these Senators as the theft of, and disregard for, IP hurts small to mid-size firms and their ability to compete domestically and internationally. Innovation and investment also suffer as a result of such theft.

Specifically, the letter points to businesses that use stolen IP. The Senators believe this is unfair, stifles innovation and forces “law-abiding businesses – large and small –to compete against those businesses that reduce their operating costs through the use of pirated IP.”

The NAAG has asked for the support of the FTC in fighting stolen IP, and put that request in writing on November 4, 2011.

Karen Kerrigan, President & CEO

The Constitution and ObamaCare

If you paid any attention to the news about the arguments before the U.S. Supreme Court over ObamaCare, it's hard to miss a very obvious, fundamental difference that exists between liberals and conservatives when it comes to the U.S. Constitution. What is that difference?

Well, first, let's be clear as to what the court case over ObamaCare is not about. It is not about the economics of ObamaCare, or whether it is smart or dumb law.

For the economist, the bankruptcy of ObamaCare should be obvious. After all, the selling point was that this massive measure would somehow rein in costs, expand coverage, and improve care. Hmmm. Now when was the last time that a vast expansion of government into any arena resulted in lower costs, and more and better service? Quite simply, the answer is: Never.

For example, ObamaCare is about increased government subsidies of health care coverage, which inevitably will result in expanded utilization. That jump in demand, of course, will increase prices, especially when the supply of services are not increased in similar proportion. For good measure, when government spending is increased, waste expands as incentives to spend other people's money with prudence, care and wisdom do not exist in the public sector.

Then add on assorted mandates, regulations and taxes, and costs inevitably get driven even higher. Eventually, as costs careen far beyond anything that government originally estimated - as has been the case in Massachusetts with RomneyCare, with Medicaid, with Medicare, and in every nation with government-run health care - the eventual result is rationing of care via government (i.e., political appointees).

So, the entire ObamaCare law works against its stated objectives of lower costs and improved service. Instead, it's about increased costs for taxpayers, both individuals and businesses; higher costs for businesses due to mandates and regulations; and government deciding what's appropriate health insurance coverage and eventually appropriate care. It's bad economics and a dumb law.

But the Supreme Court does not exist to consider whether such a law makes economic sense, or even if is smart or not. Instead, the Supreme Court is considering whether ObamaCare is constitutional or not. This case before the Court is not about health care per se; instead, it's about the power of the federal government under the Constitution.

We've read and heard about the arguments presented, and the questions and comments offered by the justices on the issues of the individual mandate requiring that each person buy health insurance, and expanded Medicaid costs for the states.

In particular, those challenging the law point out that forcing citizens to engage in an act of commerce they would not otherwise engage in simply because they are citizens is an unprecedented expansion of federal power. If allowed to go forward, then politicians could justify anything under federal powers.

As Justice Anthony Kennedy asked during the arguments, "Can you create commerce in order to regulate it?" He also observed, "The government is saying that the federal government has a duty to tell the individual citizen that it must act, and that is different from what we have in previous cases, and that changes the relationship of the federal government to the individual in a very fundamental way."

As for Medicaid, the requirement that the states accept and foot part of the bill for a huge expansion of Medicaid, or lose all federal Medicaid funding amounts to extortion by the federal government, and undermines state sovereignty implicit in our constitutional structure. The states, of course, are not forced to be part of Medicaid. But now that all are in so deep, the argument is that this clearly is federal coercion.

Chief Justice John Roberts referred to this relationship as the federal government putting a "gun to the head" of the states. He observed, "You have to give up your wallet. You don't have a choice."

What was perhaps most fascinating was the reaction to these arguments from both sides of the legal/judicial/political aisle. Conservatives noted that these are pertinent and important questions that get to what the Constitution says, allows and limits, which is critical to our system of checks and balances.

In contrast, liberals were simply aghast that these questions were given any kind of hearing. There was minimal recognition of the Constitution serving as a protection of individual liberty against government action, no matter what the intentions of those in power might be.

This case provides another powerful reminder that the Left has little regard for the Constitution itself. They fail to take serious the idea that the Constitution defines and limits the powers of government. Indeed, such a notion serves as anathema to their philosophy. What the Constitution actually says, and what the original intent was of the authors, matter not at all. Instead, in this view, the Constitution should merely conform to whatever it is that the political class would like to accomplish. In effect, there are no limits on federal power, as long as the justices happen to agree with the goals in mind when federal power is executed. That is, quite simply, the ends justify the means.

Finally, it was interesting to note a Wall Street Journal report on March 29 that included the reactions of the business community if the Court overturned the law. The only two businesses included in the article were firms that hitched their wagons to ObamaCare, and their specific business plans would have to be altered if the law was tossed out. Why not include representatives of the millions of business owners who would see increased uncertainties and costs from the law if it is allowed to stand? The bias of the story was painful.

In the end, based on the Constitution, the individual mandate should be struck down. And since that provision is so central to the law, much of the measure would not have passed without it. Therefore, the entire law should be struck down, rather than having justices acting like legislators to deem what should stay and what should go. The entire issue should be returned to elected representatives. That would be the most appropriate action from the perspective of judicial restraint and constitutionality. In this case, it also happens to be best outcome from the perspective of sound economics and getting rid of a dumb law.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.