ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, October 21, 1996 TAG: 9610210029
SECTION: VIRGINIA PAGE: C-1 EDITION: METRO
SOURCE: CHRISTINA NUCKOLS STAFF WRITER
TAXES TOO HIGH? Small-business owner William McNew counts up the taxes he pays, and the candidates offer their solutions.
William McNew, who opened Wild Bill's Grocery and Deli in Glenvar two years ago, has a few cautionary words for would-be entrepreneurs who want to start their own small business.
"I advise them not to unless they've got plenty of money," he said. "I don't have plenty of money, but I've got two full-time jobs besides this. It would be hard for me to tell somebody to do it. A whole lot of people just can't work 20 hours a day. You've got to do it to survive."
His daughter, Terry Dunman, giggled from behind the store's cash register.
"He's like that movie 'Speed,' where the bus can't go less than 50 miles per hour or it blows up," she said. "He can't go less than 100 miles per hour or he blows up."
McNew earned his nickname before he became a small-business owner.
"I attribute it to my younger days," he said. "Nothing real drastic."
But he has a pretty wild schedule now that he's juggling his grocery store and a roofing business in Montgomery County with a full-time job at Medeco Security Locks.
"It's more or less security for myself and my family," he said. "Hopefully, it will pay off in the future. Most people tell me that's been in business that it takes at least five years before you make any money."
It's hard to make money if you own a small business, he said, and he blames high taxes.
"You pay your whisky tax, your business tax, deli, Social Security, federal, state, personal property, your taxes on employees," he said, counting on his fingers. "The taxes are high for what business we do. It was really more than I had anticipated, but I'm smart enough to know there isn't a whole lot you can do about it."
McNew said he would like to make improvements to the grocery store. A utility project will soon bring sewer service within his reach, but he can't afford to hook up. He said it takes all three sources of income just to maintain what he has.
"If I didn't work at Medeco and do the roofing, I'd have to cut the part-time and one full-time worker here," he said.
And that's not something he's willing to do because all but one of his five employees at the store are family members.
"I don't think they treat the small-business people right," he said. "We are employing and giving people jobs."
Two of the three candidates in the 9th Congressional District race said they support immediate tax relief for McNew and other small-business owners. The third said his proposals might make it harder for McNew in the short term but would be beneficial over the long haul.
Democratic incumbent Rick Boucher said he opposed several recent changes that harmed small businesses, and he would support a return to more business-friendly tax policies.
Boucher said he supports reinstatement of an investment tax credit to encourage new construction and equipment purchases. The credit was repealed this year at the same time depreciation schedules were lengthened and capital gains tax breaks were eliminated. Boucher said those changes were mistakes that have become disincentives for the creation of jobs.
"This kind of targeted tax relief is needed," he said. "We urgently need to provide targeted tax relief to small business to meet their needs."
Republican candidate Patrick Muldoon said he supports those same changes and is particularly interested in the capital gains tax.
"Dole wants to cut it in half, and I would look at cutting it as much as possible," he said.
Muldoon said he also would support relief from accounting and other types of regulations that affect small businesses, which he said can be more costly than taxes.
"Every regulation is essentially a tax. Every new law we put in costs somebody some money, and it's often the small-business man."
Tom Roberts of the Virginia Independent Party, the state affiliate of the Reform Party, has a different perspective. He believes drastic and painful measures are needed to eliminate the federal deficit, and that means no tax breaks for anyone, at least for now.
Roberts said he would eliminate all tax deductions, including mortgage interest and charity deductions, until the federal budget is balanced. He also would decrease the size of the federal government by 90 percent and cut military spending in half, he said.
But Roberts said he would lower the corporate tax rate. While that might not sound fair to small-business owners like McNew, Roberts said, corporations right now find loopholes to avoid paying any taxes at all. He said a lower tax rate would actually increase their overall share.
Roberts said a balanced budget would ultimately reduce tax pressures on McNew and other small-business owners.
McNew said he doesn't believe Roberts' plan will help him now or ever. At the same time, he's skeptical he'll get a tax break from either of the other two candidates.
"Most likely if they take it out of one tax, they'll go up on another," he said. "I'll just wait and see what happens."
LENGTH: Medium: 98 lines ILLUSTRATION: PHOTO: DON PETERSEN/Staff. William McNew says the burden ofby CNBregulations and taxes on small-business owners requires him to work
two other jobs to keep on all of his store's staff. color. KEYWORDS: POLITICS CONGRESS