The Agenda

How small-business issues are shaping politics and policy.

One undeniable benefit of holding an early primary (or caucus) in a small state like New Hampshire is that any citizen has a chance to meet the candidates for president individually and interrogate them on the issues — even if the citizen is not, technically, a resident of that early voting state. And so Mark Dunau, a New York farmer and gadfly for the self-employed (through his Web site, dontsubmit.org), headed up to the Granite State to “bird dog” the Republican candidates in the week before the New Hampshire primary.

Mr. Dunau’s issue is the tax burden on the self-employed — both that the payroll tax obligation for self-employed people is 15. 3 percent because they pay both the employer and employee share of the tax (for employees, the payroll tax is 7.65 percent of income) and that the self-employed are not able to deduct the cost of their health insurance the way employers can deduct their share of employee premiums. In exchanges now posted on YouTube with four of the six candidates then in the race — he did not see Texas Governor Rick Perry, and Newt Gingrich did not take his question — he discovered these concerns were not top of mind among those who would be president.

It was Mitt Romney, the eventual primary winner, whose answer most surprised Mr. Dunau. When Mr. Dunau asked Mr. Romney, “what else will you do for the self-employed,” the former Massachusetts governor responded first by promising to lower corporate taxes, to ease the regulatory burden, and to lower energy costs. Mr. Romney won the farmer’s approval when he then said he backed making health care expenses tax deductible for the self-employed. But the approval quickly faded when the candidate concluded his answer by conceding unfamiliarity with Mr. Dunau’s other concern. “And with regards to the payroll tax, I’ll take a look at that,” he said. “I didn’t realize you’re paying that additional — that double taxation — and that’s worth taking a look.”

Former Pennsylvania Senator Rick Santorum did appear familiar with the self-employment tax, but lost himself in a digression over its history, and never said whether he would support halving it. (Just because you can ask a candidate a question in New Hampshire does not guarantee you will get an answer.) He called it a “tougher issue” and than wondered what the alternative is to the current structure, in a way that suggested he did not see one.

Only Representative Ron Paul seemed to satisfy Mr. Dunau. To the question of halving self-employment taxes, Mr. Paul said, “my goal is always to get the taxes as close to zero as possible,” though he made no explicit promise. About health insurance, he said, “I would do anything I could to get the proper deduction.” He also stood firmly against extending the rights of “personhood” to corporations, another of Mr. Dunau’s concerns. (Earlier in the day, Mr. Dunau got into an argument with Mr. Santorum at a second campaign event, interrupting the candidate after Mr. Santorum argued that Supreme Court “activism” created new rights in cases involving abortion and contraception but seemed reluctant to acknowledge that a more recent court extended first amendment rights to corporations.)

Of course, Mr. Dunau was unlikely to be swayed by anyone in the Republican field — in 2000, he ran for the United States Senate as a Green Party candidate — and he acknowledged as much at the outset of his videotaping. But even so, he seemed to rally support among the independents and Republican faithful who attended the campaign events. At a town-hall meeting in Peterborough on January 3, Mr. Dunau made an impassioned plea on self-employment taxes to Jon Huntsman, the former governor of Utah. “Some politician has to say, ‘Well, there is no organization representing the self-employed, maybe it should be me,’” he said. “Because there’s 23 million of us in this country, and you never hear that word in any debate. But we know who we are, because we see the self-employment tax every April, and it’s a killer.”*

“You’ve done a very good job,” Mr. Huntsman responded, before the crowd broke in with 20 seconds of sustained applause. He shook Mr. Dunau’s hand. When the ovation ended, he continued: “So effective that I’m going to go home and look at it.”

*Mr. Dunau may be overstating things a bit. The National Association for the Self-Employed claims 200,000 members and lobbies for making health care expenses for the self-employed tax deductible. (It does not lobby for halving the self-employment tax.) In addition, Keith Hall, the association’s national tax adviser, said that 22 million people filed sole-proprietor tax documents with the I.R.S. and thus were subject to the self-employment tax on any profits. However, only 17 million had profits to tax. (Several million members of partnerships and limited liability corporations could also be subject to the tax, Mr. Hall said.) And there’s no way to know how many of those sole proprietors relied on those enterprises for the bulk of their income and how many were using them to supplement wages from a full-time job.

Article source: http://feeds.nytimes.com/click.phdo?i=471de000188f54a606f4f6f067e89943