Joe Who? Small businesses say they're not being heard

Despite all the noise about "Joe the Plumber" in the presidential campaign, many small business owners and entrepreneurs say their voices have not been heard.

"Neither one addresses the fundamental issues of small business," says George Cloutier, founder and CEO of American Management Services, about presidential candidates Barack Obama and John McCain. His management consulting firm specializes in small businesses.

Both Obama and McCain have argued their economic and health plans would help people like Joe Wurzelbacher, a plumber from Holland, Ohio. Joe the Plumber grabbed the spotlight after Obama told him on the campaign trail he wanted to "spread the wealth around", which the McCain camp said meant higher taxes.

"The difference between (their) plans is slim to none," says Cloutier.

In the wake of the credit crisis and subsequent economic meltdown of recent weeks, many small businesses are teetering on the brink of survival. They have limited access to credit at a time when high gasoline and energy costs are pressuring their margins and consumer spending has slowed.

In a national survey released this week by Discover Small Business Watch, nearly half of 1,000 small business owners polled cited the economy as their No. 1 election concern.

"I think for small business, this is the biggest issue," says Joe Knight, CEO of Setpoint Cos., an Ogden, Utah-based manufacturer of industrial automation systems and roller coasters that employs 60 and has annual revenues of about $12 million. "We're all in there fighting it out."

Who has the best policies to help with that fight is up to debate - even within the small business community.

Like many in the Discover poll, Knight, who is also partner in a company that provides finance training to small companies, believes neither candidate has sufficiently tailored economic programs to the needs of small business. Still, he says Republican Sen. John McCain's policies make more sense than those of Democratic Sen. Barack Obama's, largely because of McCain's pledge to keep corporate taxes low.

"It's an insane policy to raise taxes when the economy is dying like this," says Knight. He also believes that Obama's platform, including a planned repeal of Bush tax cuts for households earning more than $250,000, would be detrimental to companies such as Setpoint, which exist at the larger end of the small business spectrum.

Those firms are often set up with a corporate structure that requires their owners to divide their profit and report them on their personal income statements.

"If we get taxed on our income at those higher levels, our job creation ability will be curtailed," Knight says, noting that many small business owners often pump those earnings right back into their companies, a fact he believes both campaigns have largely overlooked.

While the thought of higher taxes is indeed onerous to Stephen Holt, CEO of privately held backpack and accessories maker Yak Pak Inc., he says he believes that in the long term, Obama's economic policies will be better for the country.

"The reality is that we are at a point on so many other levels where we need to change things up," says Holt, who has progressively been outsourcing jobs to El Salvador from the company's headquarters in New York in recent years due to the high cost of health care.

"I do think fundamentally Obama has got it more right than McCain on insurance, whether it's a credit to individuals or whether it's universal health care," he says. "Health insurance is one of the biggest disincentives to have employees."

DROWNED OUT Regardless of who they back next month at the polls, most small businesses believe their concerns have been overwhelmingly drowned out by the bigger muscle in the U.S. economy, namely large Wall Street banks and big industry, which are viewed as the direct beneficiaries of the recent bailout package.

Only 19 percent of the businesses surveyed in the Discover Small Business Watch poll, which included owners of small companies with five employees or less, said they believed that the election season "has created a forum for them to be heard by the candidates."

"There's no aid in sight, including all of the bailout bill," says Cloutier, who believes that Obama has laid out a "more active program" for small business and slightly favors the Illinois senator.

Indeed, news of the recent congressional rescue plan failed to lift the outlook or expectations of the nation's 22 million small business owners, according to the Discover report.

Some 64 percent of owners polled in the survey said they rate the economy as poor, up from 57 percent in September; more than half believe the economic conditions for their businesses are getting worse. Fifty-seven percent said they disagreed with the $700 billion bailout plan approved by Congress and signed by President George W. Bush earlier this month.

Says Ryan Scully, director of Discover's business credit card in a statement: "As we have seen in previous Watch surveys, events on Wall Street do not necessarily reflect the reality for small business. They seem to have little faith that the government knows how to answer the needs of America's small business owners."

(Deborah Cohen covers small business for Reuters.com. She can be reached at smallbusinessbigissues@yahoo.com)