2020 Democratic debate No. 1: What small business wants to know

The first Democratic presidential primary debates this week will offer Americans the most unvarnished look yet at the left's policy agenda. What they see should scare them.

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Until now, Democratic candidates have been allowed to lay out their various socialist policy proposals with a friendly assist from a sympathetic media. The press usually paints their ideas, such as nationalizing health care and college tuition, in a positive light and frames them as the only alternative to rising costs.

On the debate stage, candidates won't have such help, and their radical policies will be more fully exposed. This is especially true considering the candidates are locked in a socialist policy arms race, seeking to outdo each other when it comes to who can tax, spend and regulate more.

In the crosshairs of this Democratic agenda are the 30 million American small businesses and the nearly 60 million hardworking Americans that they employ. While Democrats' socialist policies threaten all Americans, small businesses have the most to lose given their position on the frontlines of the American economy.

The debate moderators should ask the candidates: "How do you suppose your left-leaning proposals would affect American small businesses?"

There's no good answer. Take Democrats' tax plans. They not only want to reverse President Trump's tax cuts but also levy massive new tax increases on job creators. This threatens the current booming labor market that is experiencing the fastest wage growth in a decade and the lowest unemployment rate in a half-century.

Consider the impact of eliminating the new 20 percent small business tax deduction. Though it's received almost no media attention, this provision of the tax cuts that took effect last year allows small businesses to keep more of their earnings in order to invest, expand, hire and raise wages. This allows them to better compete with their big business and international counterparts. This tax relief would disappear along with the economic gains that come with it if someone on the debate stage becomes president.

And that would just be the start. Candidate Julian Castro has floated raising tax rates to around 90 percent. Sen. Elizabeth Warren has called for confiscating property in the form of a wealth tax. If enacted, these tax rates would mean fewer resources available for small businesses to create opportunity. It would mean less money in local communities, where it circulates and creates growth, and more money in the hands of government, where it is largely wasted.

Aside from the negative effects of the taxes needed to fund them, Democrats' socialist-like programs would also negatively affect Amerian small businesses. Nationalizing vast swaths of the American economy would make countless small businesses little more than government employees.

For instance, the Democrats' proposed Medicare-for-All plan would make government the single-payer for all the medical products and services throughout the country. Small businesses operating in this space, which is approaching one-fifth of the economy, would be forced to take whatever rates the government offers.

Some would lose out to substandard, politically-favored crony competitors. Same story for the small businesses operating in the many other sectors that would operate under a much larger government boot if Democrats take over.

The Democrats' regulatory agenda, which includes dozens of new labor and environmental regulations, including a $15 nationwide minimum wage and a new standard for franchising and contracting, would also hit small businesses the hardest because they often don't have the earnings necessary to comply.

While Democrats are fond of attributing the sizable profit margins at tech and finance firms to all businesses, in reality, most small businesses operate on razor thin profit margins of a few cents on the dollar. Small businesses would be forced to offset new regulatory costs by reducing compensation for employees or increasing prices on consumers. Some would be forced to close their doors entirely.

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Democrats have so far been able to portray their socialist policies as a free lunch, yet the reality is that small businesses would have to pick up the tab. Don’t let them fool you.

Alfredo Ortiz is the president and CEO of the Job Creators Network.