President Trump’s regulatory rollback is unprecedented. According to a recent American Banker report, the issuance of financial regulations has dropped to a 40-year low under the Trump administration.
Regulators are now issuing or revising two to four items a week, down from the longstanding average of five to seven items a week. And it’s saving employers money. In the fourth quarter of 2017, the financial industry saw more than $20,000 in compliance savings per financial institution — up from only $10,000 per institution two years prior.
Wall Street is only the tip of the iceberg. Since Inauguration Day, President Trump has rolled back over 1,500 planned regulatory actions, repealing 22 regulations for each new rule issued and cutting regulatory costs by $8 billion.
Much of it can now be reinvested into business expansion and job creation. For years, small business owners, America’s most dedicated job creators, have been drowning in red tape. While our millions of small businesses employ nearly 60 million workers, half of the U.S. workforce, they are forced to set aside valuable resources for compliance instead of using it for private investment. In his or her first year of operation, the average U.S. small business owner pays over $83,000 in regulatory costs. One-third of small business owners spend more than 80 hours a year meeting regulatory requirements, while even more (52 percent) have held off hiring a new employee because of government red tape.
Imagine if they spent those hours adding staff, training their current workers, and looking into expansion opportunities.
I’m a small business owner myself, and I can attest to the burdens of big regulation. As the president and CEO of Joseph’s Lite Cookies in Florida, I run a family-owned sugar-free cookie business. We bake more than 12 million sugar-free cookies a day, in addition to supplying other diabetic-friendly products.
We’d bake even more if it wasn’t for excessive government compliance burdens. I spend dozens of hours a year reviewing government documents and consulting legal experts to figure out where to sign. One of the most daunting hurdles facing my business, and many other job creators I’ve encountered, is the complexity of document retention. Record retention requirements issued by the Labor Department, Internal Revenue Service, and other federal agencies place undue pressure on small business owners to keep track of annual statements, contracts, licenses, permits, and tax returns.
From my first hiring to the opening of a new facility and expanding into international markets, I’ve been forced to retain countless government documents in accordance with strict requirements that vary from document to document. While invoices and receivables must be kept for five years, payroll documents carry a six-year retention requirement. Personnel files are to be retained for three years.
Inventory forms? Four years. Employee withholding? Seven years. Tax returns? Permanent retention.
Confusing? You bet.
It’s no wonder that small business owners spend dozens of hours on regulatory compliance when variable retention requirements keep us confused. How does the federal government expect us to keep track of the different guidelines when we’re busy serving customers, clients, and employees? Why not just standardize the retention requirements and make most, if not all, uniform?
President Trump understands the regulatory burden better than most, and certainly the most in presidential history. I urge him to act on behalf of small businesses and tackle record retention next. Let’s make the regulatory rollback a revolution.
Joseph Semprevivo is the president and CEO of Joseph’s Lite Cookies in Florida. He is an adjunct professor of finance, real estate and insurance at Indian River State College and the best-selling author of Madness, Miracles, Millions.
