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I’ve used this quote before, but it bears repeating. Albert Einstein said, “The world as we have created it is a

I am often asked why I selected “Building Main Street, not Wall Street” title for my column.  While the reasons are many, here are a few of them. Main Street and Wall Street represent two vastly different facets of the American economy.

Main Street symbolizes small businesses which make up 80+ percent of the American economy, their local communities, and everyday citizens who contribute to the grassroots of the economy. Wall Street, on the other hand, represents large corporations, financial institutions, and the capital markets that drive national and global economic trends. While both are essential to the economic ecosystem, government regulations often inadvertently and/or on purpose favor Wall Street over Main Street, stifling the growth of the latter.

A great example is the current tax laws established in 2017 offered great assistance to small businesses. Between a 20% bonus to small business along with corporate tax rates dropping to 21%, small and mid-sized business where much better able to compete.  Eliminating those small business tax incentives will devastate the small business community.  

In many cases, government regulations are designed to maintain market stability, protect consumers, and ensure fair competition. However, enter the world of unintended consequences. These regulations often come with substantial compliance costs, which disproportionately affect small businesses. According to the SBA, small businesses bear a regulatory cost of $11,700 per employee annually, 20% higher than the cost faced by large businesses. To be fair, small business doesn’t have the advantage of economies of scale, they can’t spread these costs over a larger revenue base. Small businesses struggle to absorb these costs, leading to reduced profitability, slower growth, and, in some cases, closure.

One of the most significant regulatory burdens on Main Street comes from compliance with complex tax codes. The U.S. tax system is notoriously complicated, with small businesses spending an average of 80 hours and $5,000 annually on tax preparation alone. This is time and money that could otherwise be invested in business expansion, employee wages, or product development. In contrast, large corporations have teams of accountants and lawyers to navigate these complexities, allowing them to minimize their tax liabilities and reinvest savings into their operations.

Healthcare regulations are another area where small businesses are disproportionately affected. The Affordable Care Act, imposed significant costs on small businesses. Companies with 50 or more employees are required to provide health insurance or face penalties. For a business operating on thin margins, this can be a substantial financial burden. A 2018 survey by the NSBA found that 71% of small businesses cited healthcare costs as a major concern, with many reporting that they had to reduce hiring or cut employee hours to afford compliance with the ACA.

Environmental regulations also present challenges. These regulations often require costly upgrades to equipment, facilities, and processes. Large corporations can more easily absorb these costs or pass them on to consumers. However, small businesses on Main Street often lack the capital to make such investments, leading to fines, reduced competitiveness, or even business closure.

While regulations impose significant burdens on Main Street, they often inadvertently incentivize Wall Street activities. Large corporations and financial institutions, with vast resources, are better equipped to influence regulatory outcomes through lobbying. As per OpenSecrets, the financial sector spent $2.9 billion on lobbying in 2020 alone. This lobbying power allows Wall Street to shape regulations benefitting large corporations, at the expense of smaller competitors.

The complexity of financial regulations like the Dodd-Frank Act, introduced in 2008, creates barriers to entry that protect established financial institutions from new competition. The cost of compliance with Dodd-Frank has been estimated at over $36 billion for the financial industry. While large banks can afford these costs, smaller banks and financial institutions often struggle, leading to consolidation in the industry and reduced competition. This consolidation further strengthens Wall Street’s dominance, as fewer, larger banks control a greater share of the market.

While many of the above were not designed to hurt small business, the unintended consequences cannot be ignored. Businesses on Main Street have never been in a more precarious position as they are now. Never has the future of small business and by default small communities been under a great stress than now.  I am not even sure most realize the state of small business.  While this is not a political column, the time has never been greater for small businesses to make their voices heard, it is literally a matter of life and death for the future of small business.

John Newby is a nationally recognized Columnist, Speaker, & Publisher. He consults with Chambers, Communities, Business & Media. His “Building Main Street, not Wall Street,” column appears in 60+ newspapers and media outlets. As founder of Truly-Local, he assists chambers, communities, media, and businesses in creating synergies that build vibrant communities. He can be reached at: John@Truly-Local.org