It's my PARTY

Entrepreneur, Sept, 2000 by Chris Sandlund

With far more relevance to current employees, the vice president wants to make learning (hence, worker training) a lifelong process. He proposes a 401(j) savings plan that would be similar to the 401(k) retirement plan. The new program would fund kids in college or parents adding skills for current jobs. Better still, employers could contribute to the tax-exempt accounts. Bush wants to increase deductions for education savings account from $500 to $5,000, but makes no mention of employer contributions.

Bush also sees a second way to increase the number of qualified workers: Increase the labor pool. He offers two plans to do so: Eliminate the Social Security earnings test that limits seniors from re-entering the workforce, and increase the number of H-lB visas (currently 115,000) to allow more trained foreign workers into the country. Gore supports increasing the number of such foreign workers to more than 200,000.

ISSUE 2: MAKING HEALTH INSURANCE AFFORDABLE

Gore took the early lead in health care one year ago, when he proposed that small businesses be allowed to group across state lines to purchase health insurance as health-care purchasing coalitions. "Pooling is something that has worked well at a state level," says Bill Miller, political director for the U.S. Chamber of Commerce.

Gore wants to provide a 25 percent tax credit for the cost of each employee that a small business covers after joining such a plan. The associations promoted by Gore, however, are not the Association Health Plans (AHPs) advocated by some small-business advocacy groups. Gore feels that, because AHPs would be exempt from state regulations, these plans would not carry as many options as traditional insurance offerings.

Bush supports the AHP concept and adopted it into his health-care proposal in April. Bush also wants to make medical savings accounts (currently a trial program) permanent and allow employers to contribute to employees' accounts.

Currently, the law limits the deductibility of long-term health care for the self-employed (60 percent until 2001, 70 percent until 2003, 100 percent after 2003). Long-term health policies have a sliding scale for the maximum amount that, like other health-care insurance, is 60 percent deductible this year. At press time, only Bush favors changing current law to let business owners deduct all of their health insurance immediately, as opposed to waiting until 2003. Gore is heavily in favor of creating a $3,000 credit for long-term care.

ISSUE 3: CUTTING TAXES

Bush has made tax cuts the centerpiece of his campaign. He wants to cut the top-marginal personal tax rate to 33 percent from 39.6 percent. His rationale: Encourage entrepreneurship. He also is in support of a permanent research-and-development tax credit and continuing the moratorium on sales taxes for Internet purchases through at least 2006.

According to the small-business lobby, support for reforming or eliminating the estate tax is more important. "Even if you do get the insurance and hire the lawyers [to make a plan for the tax], that's a huge amount of money that could have been invested in the business," says McCracken. Bush supports repeal of the tax. At press time, Gore has come out in favor of raising the family exemption for small businesses. He says that will allow 70 percent of small businesses to pass from one generation to the next without incurring any payment of the tax. At the time that this article went to press, the real nuts and bolts of Gore's plan were still rather sketchy and unclear.