Why Bush Gets a Thumbs-Up on Main Street
In our poll of entrepreneurs, most like the President's tax cuts and national security record. And few blame him for the rise in health costs and federal deficits.
By Richard McGill Murphy

(FORTUNE Small Business) – The Presidential race may be closely contested among voters overall, but President Bush has been quietly building an impressive lead among entrepreneurs, according to an exclusive FSB/Zogby Interactive poll. Our online survey of 1,897 small-business owners showed Bush leading Senator John Kerry by 53% to 43% in late August. Bush led Kerry among entrepreneurs throughout the country, except for the West Coast, and among all races, including African Americans and Latinos.

Bush and Kerry were tied among women, who own just under half of the small businesses in America and have emerged as key swing voters (see "The New Soccer Moms," July/ August). Over the summer Bush erased the six-point lead that Kerry enjoyed among female entrepreneurs in our last survey in May. Bush also leads Kerry 53% to 43% among self-described independent voters, up from the six-point lead he held in May. And black business owners swung from favoring Kerry by 20 points in May (53% to 33%) to supporting Bush by 11 points in August (54% to 43%). With all those gains, Bush is winning the entrepreneurial swing vote.

More than many Democratic candidates, Kerry has joined Bush in lavishing attention on small-business owners. So why is Bush winning them over? Most entrepreneurs, of course, have historically backed pro-business Republicans. (Bush won the small-business vote by 11 points in 2000, according to an election-night survey by The Polling Company.) But Bush has forged an unusually close connection with this audience, learning its code phrases and playing to its majority more often than Kerry does on the issues of greatest importance to it, especially taxes and national security.

Among small-business owners, 91% of self-described Democrats favored Kerry, while 94% of Republicans favored Bush (38% of our respondents were Republicans, 33% Democrats, and 29% independents). And on issues ranging from health insurance to taxes, party affiliation skews those voters' perceptions of their own bottom line. Among Democrats, 65% say business has worsened over the past four years, while 71% of Republicans say it has improved. Three-fourths of Democrats claim they have not benefited from Bush's 2003 tax cuts, while 85% of Republicans say their tax bill has declined.

Income doesn't explain the polarized perceptions; the Democrats in our survey earn as much as the Republicans. Yet the two groups of entrepreneurs seem to inhabit different countries. Like 65% of the Republicans in our survey, Michael Fredrich, 53, sees the war on terror as the most important issue at stake in this election. "If you don't have national security, everything else is a fringe issue," says the president of Manitowoc Custom Molding in Manitowoc, Wis.

Democratic entrepreneurs are more divided, with a plurality of 35% citing jobs and the economy as the key issue. "The economic side is more important," says Ted Burke, 57, owner of two restaurants in Northern California.

The President declined to discuss his small-business platform with FSB, delegating the task to Commerce Secretary Don Evans, who emphasized the 2003 tax cuts as a stimulus to entrepreneurship. "If you want more of something, tax it less," Evans said.

Speaking at a small-business summit in Washington, D.C., President Bush vowed to eliminate the "death tax" and curb greedy trial lawyers. He praised the audience for generating the vast majority of new jobs (though it remains controversial whether jobs have been gained or lost under Bush, as reported in the next article). He noted that small-business owners could thank him for quadrupling their annual tax deduction for equipment purchases. He attacked Kerry's plan to raise taxes on personal incomes of $200,000 and more, stressing that many small businesses are taxed at the individual rate. "What is good for small business," he said, "is good for America."

There and at his party's convention in New York City, Bush also touted his proposal to curb soaring health insurance costs by allowing business owners to pool risks across state lines in so-called association health plans—a popular prescription that many experts call risky.

By contrast, Kerry's marquee health-care proposals (to allow small firms to join the congressional health plan and to have the federal government pick up the tab for catastrophic health costs) have drawn little interest from entrepreneurs. That pattern holds for other issues. The federal budget deficit has shot up to more than $400 billion under Bush, yet many business owners believe that Kerry would make it worse. The Federal Register of regulations has swelled to record size under Bush, yet business owners tend to brand Kerry as the apostle of big government.

Some voters bridle at the clash between Bush's rhetoric and his record on core business issues such as fiscal prudence, regulation, and free trade. But at the end of the day, our poll shows, he speaks Main Street's language on security and taxes, the issues that entrepreneurs care about most.

HEAD-TO-HEAD

Which candidate would you vote for if the election were hold today?

DEFICIT BLUES

Far more Democrats than Republicans are worried about the deficit.

FOR BETTER OR WORSE

Republicans say bussiness has improved over the past four years Democrats strongly disagree.

TAX TIFF

Republican business owners say they benefited from Bush's tax cuts Democrats say they did not.

HEALTH VS. WEALTH

Republicans care more about taxes than health policy.