During the 1992 presidential campaign, Bill Clinton famously intoned, “I feel your pain,” reassuring voters he understood what they were going through. Since then, similar statements of empathy have become a staple for politicians, but too often they are just hollow words.

Take small business owners, for example, which are the backbone of America’s economy. They are Washington’s forgotten constituency.

Most elected officials have no idea what it’s like to risk everything you have or to struggle to meet payroll for your employees and their families as waves of new taxes, fees and regulations threaten to drown you and your business.  

One politician who got that firsthand experience was former U.S. Senator and presidential candidate George McGovern, a Democrat.

In a 1992 Wall Street Journal column, “A Politician’s Dream is a Businessman’s Nightmare,” McGovern described his experience running a Connecticut hotel and conference center. He ultimately went bankrupt, a failure he attributed in large part to local, state and federal regulations that were passed with good intentions, but no understanding of how they burdened small business owners.

McGovern didn’t dwell on taxes, but today, especially in Washington, he would be alarmed by our growing tax burden on private sector employers. In 1992, Washington did not have a state capital gains tax and there were only murmurs about income tax. Our tax policy, coupled with abundant lower cost electricity, made Washington one of the top 10 most favorable states in which to invest.

Deeply affected by his failure, McGovern became an advocate for family-owned businesses saying: “I wish that during the years I was in public office, I had had this firsthand experience about the difficulties business people face every day.”  

While politicians often tout their support for small business, they are the least understood and most overlooked political constituency.

These folks – particularly the owners of family businesses – put their life savings on the line 12 to 16 hours a day, scrambling to make ends meet. They don’t have time to campaign for political candidates or lobby elected officials, yet too often they feel the brunt of tax and fee increases and cumbersome regulations.

Family-owned businesses are America’s economic backbone.

According to Family Enterprise USA (FEUSA) 2024 data, America’s 32 million family businesses are our largest private employer accounting for 83.3 million jobs. They contribute $7.7 trillion annually to U.S. gross domestic product.

The data showed that in Washington, a third of businesses were small, fewer than 500 employees, and family owned. FEUSA found more than 30% of all family-owned businesses survive in the second generation but only 12% continue into the third generation.

Today, businesses which are struggling to survive as the cumulative costs of state and local taxes, regulations, permitting and fees become excessive and are forcing businesses to leave Washington.

For example, it is clear in border communities such as Spokane, Pullman and Clarkston that Coeur d’Alene, Moscow and Lewiston become better options to run a business and they move.

Charging a 5% payroll tax on private employers with workers who earn more than $125,000 per year is like telling employers to invest in Idaho. Gov. Bob Ferguson’s proposed 9.9% tax on income over $1 million (revenues starting 2029) is just as problematic.

Taxes have consequences.  In March 2023, Fisher Investment moved its headquarters from Camas to Dallas after the Washington State Supreme Court ruled that the state’s capital gains tax was constitutional. By June 2024, Fisher had 5,300 Texas employees.

It would help if, to run for office, politicians had to first sweat making a payroll, struggle to deal with the complex and costly maze of government regulations, and deal with the uncertainty of business cycles and global competition.

Hopefully, Ferguson and Democrat state legislative leaders will pause and calculate the added pain, they are about to inflict on tax paying jobmakers. Rolling the dice and bumping up taxes and fees again are “economy killers.” 

Don C. Brunell is a business analyst, writer and columnist who lives in Vancouver. He can be contacted at [email protected].