How to Save American Business

Let's push the voluntary, patriotic remanufacturing of everything from cars to computers. Let's challenge U.S. companies to take the initiative and come up with the world's best recycling programs. I have no doubt we can do it.

The Accounting Mess

You've said that you want to streamline tax-reporting requirements for America's small businesses, and I believe you. In one speech, you estimated that 2.6 million small-business owners would save 61 million hours as a result of tax simplification and the resulting reduction in paperwork. Regulations, you noted, put an enormous strain on the small-business sector. Those of us in the sector couldn't agree more.

Unfortunately, our reporting requirements have become more onerous, not less, in the past four years, thanks mainly to passage of the Sarbanes-Oxley Act in 2002. Although it was intended to regulate reporting in publicly held companies, it has had a huge impact on private companies like ours because of what accounting firms have done with it. Sarbanes-Oxley has created a whole new business for them. To comply with the act's rules, they've adopted new audit standards that dramatically increase the price of an audit.

Our accounting firm told us recently that our auditing bill would almost double, from $50,000 in 2003 to $90,000 in 2004, because the firm would need 250 more hours to audit our books this year than it needed last year. That shocked our employees, who told me to find another accountant. But I suspect another firm will charge just as much. The new regulations, and the new penalties, have increased demand for accounting services and created an accountant shortage, driving up prices across the board. All of us who did nothing wrong are paying through the nose for the sins of Enron and WorldCom.

It's not too late to reverse some of these regulations, and I hope you'll press Congress to do so. They obviously need some teaching as well. You should remind them that, when they pass laws and makes rules, they need to think more about the effect the changes will have on small entrepreneurial companies. That's where the future lies. We're not going to see any more Microsofts (MSFT Quote) or Wal-Marts (WMT Quote) being built from the ground up. Big companies aren't where it's at. Young people are instead starting their own small businesses in the communities where they live. Local organizations like the chambers of commerce are helping these upstarts, but the federal government has done little or nothing for them, as far as I can tell. If that's going to change, you'll have to lead the way.