Tax enthusiasts: study Euro-woes

Last week's so called jobs summit in Detroit spotlighted Europe's persistent unemployment problem -- over 10% in every country of the 12-nation European Union. Reason: Europe has loaded so many taxes, regulations and other costs onto a job that European entrepreneurs are paralyzed, and larger companies have substituted machines for labor or moved offshore -- e.g., BMW's move to South Carolina. There's a lesson here for the Clintons and their allies in Congress who want to impose a job tax to pay for health care reform: Don't do it! There's another lesson. The U.S. should do everything it can to nurture its family-based, consumer-oriented entrepreneurial economy. Of America's 22 million business enterprises, only 7,000 have more than 500 employees. The rest are small businesses: family-owned enterprises, small business and professional service firms, sole proprietorships, and unincorporated home businesses.

By contrast, the European Union and parts of Asia -- especially Japan and South Korea -- have producer-oriented plantation economies where large enterprises and public-private alliances (i.e., politics) drive economic activity. Example: In the U.S., there have been six new private jobs for each new government job; in Europe, there are two new government jobs for each new private job.

Also, America's family-based entrepreneurial economy is growing stronger, not weaker. America's small enterprises under 100 employees account for nearly all net new job creation, more than ha}f of U.S. exports and much of the new technology and innovation that fuel U.S. economic and productivity growth. Reason: The market-driven economies of the U.S. and other entrepreneurial cultures of Taiwan, Hong Kong, South China and most of Southeast Asia are more in sync with the realities of innovation and competition in niche markets of the New Economy.

Enter the small office-home office (SOHO) market, the most rapidly growing segment of the small business sector. According to Link Resources, more than 41 million Americans do some portion of their work at home, where one-third have computers; 40% have modems, and more than four million home users are linked into on-line services such as CompuServe, Prodigy, or America On-Line. This group grew by more than 4996 since 1989. And 7.6 million telecommute at least one day a week -- up from 5.5 million in 1991.

The importance of the SOHO movement cannot be overestimated. Economically, SOHO spurs job creation, innovation and U.S. competitiveness. Socially, SOHO is reshaping cities and the way we use urban real estate and office buildings.

SOHO also create new possibilities for small town America because so many in the movement want to live there -- and modern telecomputers (the combination of computers, software, TV and telecommunications) now make living and working in remote locations possible.

That's why it is important to understand that SOHO is not about a place to work. SOHO is about our culture and how increasing numbers of Americans will choose to live, work, play, learn and move around in the future. Removing discriminatory taxes and other public policy obstacles to the SOHO movement is one way to inoculate America from the virus of Eurosclerosis -- on display in Detroit last week.