AG Final Draft

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University of South Florida *

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2041

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Political Science

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Feb 20, 2024

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Uploaded by DoctorSardineMaster660

Final Paper Alikhan Nasyrbekov College of Education, University of South Florida POS 2041: American Government Robbin Mellen Jr November 28, 2023

Final Paper There is no question about the importance of small businesses to the American economy; they have a considerable impact on job creation, progress, and economic expansion. But businesses frequently encounter a wide range of difficulties, major among them being the regulatory framework put in place by the federal and state governments. Federal laws, tax rules, and the availability of funding and resources for workplace development are some of the key elements that either help or hurt small businesses' ability to succeed. The intricate relationship between the federal and state governments in determining the business climate is essential to the survival and expansion of smaller enterprises. Furthermore, recognizing the extent and applicability of these regulations depends on how small businesses are defined and recognized (United States Department of State, 2019). This essay investigates the regulatory functions of both the federal and state governments, focusing on the effects of their regulations on small firms. It also explores the cooperation—or lack of it—between the federal and state governments in resolving issues that small companies encounter. Federal and State Governments' Role in Small Businesses Federal Government’s Role in Small Businesses Significant authority over companies, especially small ones, resides in the federal government. Over time, there has been a notable growth in the scope of federal rules, which has affected small firms' operational environment. The U.S. Small Business Administration (SBA), which establishes the size requirements defining small firms and eases their access to government contracts, is one of the key federal regulatory agencies influencing small businesses. Federal tax laws and regulations, like those that were implemented in the banking industry during the financial crisis, can also have a big impact on how small firms operate (American

Action Forum, 2015). Maintaining corporate conformity with relevant legislation and creating an atmosphere that supports the expansion and viability of small businesses are two tasks that the federal government must strike a balance between. Furthermore, the degree of participation and collaboration between the federal and state governments may play a critical role in simplifying laws and regulations and lowering administrative barriers for small enterprises. Harmonizing tax laws can be a noteworthy area of cooperation to guarantee that small enterprises are not unfairly taxed by intricate tax laws in various jurisdictions (Streeter, 2013). Collaboration for easier tax compliance may drastically lower small businesses' administrative workloads and free up more funds for expansion-focused endeavors. In addition, collaborative efforts aimed at enhancing capabilities, exchanging knowledge, and stimulating creativity may be extremely important in establishing a favorable atmosphere for small enterprises. Effective cooperation can also be hampered by competing regulatory agendas or political divisions between federal and state agencies, notwithstanding these possible advantages. In order to fully utilize the capacity of both the federal and state governments to assist small company development and promote overall economic growth, it is imperative that a culture of constant communication, respect, and common goals be established. State Government’s Role in Small Businesses The state governments are also very important in determining how small businesses operate. In addition to overseeing licensing, zoning laws, and state tax laws, they frequently run small company assistance programs (Streeter, 2013). Some States may have differing rates of small company growth due to differences in their policies. Furthermore, state governments can offer funds for workplace improvement, which may help small enterprises improve their

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operations and staff skill sets. These state-level initiatives may either support federal laws or contradict them, which will have a big effect on how easy it is to do business. Furthermore, state governments are in a unique position to design regulations that address the particular requirements and difficulties experienced by small firms operating under their authority. State policies, which address the unique economic, social, and demographic conditions of each state, can be more subtle than federal laws, which tend to be more general and all- encompassing. State legislatures, for example, might design regulations that facilitate small enterprises' access to financing or offer subsidies for technical innovation in order to encourage business ownership. Additionally, they may collaborate with nearby educational institutions, study centers, and business groups to build an environment that fosters innovation and growth for small businesses. State governments have a significant influence on how small businesses operate because of their capacity to interact with regional stakeholders and create customized rules. State-level involvement also makes it easier for the business community to provide more direct feedback, which is helpful for changing and reforming policies to create an environment that is more favorable to the expansion and sustainability of small firms. By implementing customized strategies, state governments could greatly alleviate the obstacles that small firms encounter, thereby augmenting their capacity to prosper and make a positive impact on the regional and national economies. Federal-State Government Collaboration and Conflicts The way the federal and state governments engage may either help or worsen the problems entrepreneurs experience. There are times when state and federal laws coincide, offering a framework that fosters the expansion of small businesses. Conflicts, however, can occur when state policies collide with federal goals or when federal restrictions are seen as

oppressive. The degree of collaboration between the federal and state governments may have a substantial impact on small firms' regulatory load, which in turn can have an impact on their capacity to develop and support the economy. The development and viability of small enterprises in the United States may be greatly aided by federal and state governments working together to harmonize regulations and create a favorable regulatory environment. Plus, the degree of participation and collaboration within the federal and state governments may play a critical role in simplifying laws and regulations and lowering administrative barriers for small enterprises. Harmonizing tax laws can be a noteworthy area of cooperation to guarantee that small enterprises are not unfairly taxed by intricate tax laws in various jurisdictions (Streeter, 2013). Collaboration to streamline tax compliance may drastically lessen small businesses' administrative workloads and free up more funds for expansion-focused endeavors. In addition, collaborative efforts aimed at enhancing capabilities, exchanging understanding, and stimulating creativity may be extremely important in establishing a favorable atmosphere for small firms. Nevertheless, despite these possible advantages, effective cooperation can occasionally be hampered by competing regulatory agendas or political divisions between federal and state governments. Therefore, using the combined ability of federal and state governments to assist small company development and contribute to wider economic growth requires cultivating a culture of ongoing communication, respect, and common goals. Federal and State Government: A Closing Analysis In combination, the federal and state governments have made significant strides in improving the regulatory environment for small enterprises in the US. As an example, the U.S. Small Business Administration (SBA) introduced simplified procedures that have greatly

lowered administrative barriers, making it simpler for small firms to obtain funds and government grants (Batkins & Gitis, 2015). State-level programs like California's Small Business Loan Guarantee Program (SBLGP) have given small firms vital aid in enhancing their development and resiliency. But difficulties still exist despite these encouraging developments. According to Streeter's (2013) examination of the effects of tax policy, small company owners still face many difficulties because of complicated and occasionally contradictory tax laws that transcend state and federal borders. Consistency between federal and state laws and increased cooperation are critical to the future of small business regulations. The alignment of tax legislation is a crucial topic that needs awareness. Small e-commerce firms can now face considerable regulatory difficulties related to sales tax obligations. One way to mitigate this is to implement a uniform approach to these requirements. Moreover, the creation of a federal-state regulatory forum may ensure continuous communication and that the government's two branches cooperate to promote small company expansion rather than unintentionally obstruct it. The topics covered in this forum can include recognizing and resolving policy disputes, exchanging efficient methods, and creating cooperative projects that efficiently use state and federal funding. In summary, there is still a great deal of work to be accomplished even if steps have been taken to create a more encouraging atmosphere for small enterprises. Federal and State governments must take an integrated strategy to policy development that not only tackles today's issues but also looks ahead to what the nation's requirements will be in the future if they are to succeed in the days to come. They can guarantee the survival of small firms, which are essential to the American economy, and their ability to foster creativity and variety in the economy by taking this action. Federal and state governments must work together to create a

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regulatory environment that recognizes and positively encourages the special requirements and opportunities of small enterprises.

Annotated Bibliography Batkins, S., & Gitis., B. (2015). Regulatory Impact on Small Business Establishments. American Action Forum . https://www.americanactionforum.org/research/regulatory-impact-on- small-business-establishments. This source talks about the steps small businesses must take to be accepted in this regard, particularly if they want to operate as government-appointed contractors. The source makes it simpler to understand the prerequisites for small enterprises by streamlining technical definitions and requirements. In the talks that follow, this clarity will be crucial for delving into the complex federal and state regulations that impact these organizations. Furthermore, the source illuminates the administrative complexity that small business owners may encounter and highlights the need of comprehending these terms. Hurst, E., & Pugsley, B. W. (2011). What Do Small Businesses Do? National Bureau of Economic Research . https://www.nber.org/papers/w17041. This research investigates the traits and objectives of American small-business entrepreneurs. It specifically examines the industries in which small enterprises are concentrated, placing special emphasis on small shops, restaurants, real estate, and skilled labor. The relevance of non-financial advantages in the choice to launch a firm is also explored in the article. The National Bureau of Economic Studies (NBER), a renowned organization well known for its economic studies, is where Erik Hurst and Benjamin Wild Pugsley are linked. Their affiliation with NBER highlights their proficiency in carrying out thorough economic analysis. The study highlights the diversified industry

concentration of small firms as an indirect way of addressing the function of state and federal governments. The business climate is significantly influenced by state governments through several measures, including tax laws. The paper's findings on small company owners' non-financial incentives also have significance for state and federal policy considerations. By using this knowledge, policymakers may modify incentives and rules to support small company growth while considering the particulars of certain industries. As a result, the research presented in this study provides important background for conversations regarding how the federal and state governments might help small enterprises. Streeter, J. (2013). How Do Tax Policies Affect Individuals and Businesses? Stanford | Institute for Economic Policy Research . https://siepr.stanford.edu/publications/policy-brief/how- do-tax-policies-affect-individuals-and-businesses#:~:text=Changes%20in%20the%20tax %20codes,locate%20the%20businesses%20they%20create. The article examines how tax laws affect both people and corporations, revealing the complex ways that adjustments to tax laws may affect economic activity. It explores how tax laws and corporate actions interact, giving insights into the dynamics of taxes and how they affect the overall economic environment. J. Streeter's affiliation with Stanford | Institute for Economic Policy Research suggests that he has experience in financial research. The institute is famous for its achievements in the field of research. Streeter has credibility because of his involvement with such a prominent organization, which implies a solid background in economic analysis and policy research. This resource aligns with the study topic of how tax policy impacts small businesses in the U.S. and is useful for comprehending the larger consequences of tax laws on firms. Understanding the possible

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effects of changes in federal and state tax rules on the decision-making procedures of small firms is based on Streeter's observations. The data from this source will aid in a careful investigation of the role that tax policy plays in promoting or impeding the expansion and sustainability of small businesses in the American economy. United States Department of State. (2019). What Is a Small Business? https://www.state.gov/what-is-a-small-business/. The requirements to be considered a small business in the United States are listed on this website. It states that in addition to self-certifying their company as small when applying as a federal contractor in the System for Award Management (SAM), contractors must also abide by the industry-specific guidelines set by the U.S. Small Business Administration (SBA). In addition to being organized for profit, having a place of business in the US, operating primarily within the US, and being independently owned and operated. This source offers an official definition of small enterprises, which is essential for comprehending the range and implementation of state and federal regulations covered in other sources.

AG Final Draft

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