We believe that there should be two rates, and a lower rate for smaller companies, simply because the cost of doing business as a smaller company is generally higher per capita than it is to do business as a larger company. It allows smaller business to retain more of their income and actually invest it in those areas that are of higher cost to them.
The first is the cost of dealing with regulations. I showed you with a chart that it's up to five times more expensive for small businesses just to deal with the red tape than it is for a larger company.
Access to financing is much more difficult as a smaller company than it is for a larger company. In fact, when they do get financing, it's often more expensive because they can't necessarily get the same rates as a large company can. This allows them an opportunity to retain some of their own income and invest it back into their firms.
Those are just two, and we could go on with others as well, really key factors that we think are important as to why there needs to be a lower rate for smaller companies.