An Open Letter to Elon Musk from American Small Business League President Lloyd Chapman

PETALUMA, Calif., December 12, 2024–(BUSINESS WIRE)–The American Small Business League (ASBL) was founded in 2004 on the principle that small businesses are the backbone of a vital American economy and should receive a fair portion of the total value of all prime contracts. ASBL President Lloyd Chapman issued the following open letter to Elon Musk:

I am thrilled you will be taking part in President Trump’s new administration and his campaign to “Make America Great Again.” I have some information that will truly help MAGA.

99.9% of all businesses in America are small businesses. Small businesses are responsible for over 98% of all net new jobs, over 50% of the private sector work force, over 50% of the GDP, and over 90% of all U.S. exports.

The Small Business Act, administered by the Small Business Administration, mandates a minimum of 23% of all federal contracts be awarded to small businesses. For over 20 years, a long series of federal investigations and investigative reports in the media have found that isn’t happening. A simple internet search will reveal that many large corporations are being awarded contracts that should be awarded to small businesses. Today, there are powerful people in Washington that would like to see the SBA closed to obscure rampant abuses that could be considered felony federal contracting fraud.

Compelling data indicates legitimate small businesses with 100 employees or less are only receiving around 3% of the total volume of all federal contracts. That’s a shortfall of 20%.

Data from the U.S. Senate Small Business Committee indicates for every 1% increase in federal contracts to small businesses, 100,000 new jobs would be created annually. If legitimate small businesses were to receive the full 23% of all federal contracts, that would be a 20% increase. That would create two million net new jobs annually. That would be an 80% increase in the number of net new jobs the government is currently claiming are being created on an annual basis.

If 99.9% of U.S. firms are small businesses, that means that only .01% are large businesses. A report from the Government Accountability Office found 34% of this top .01% pay no federal income tax. Compelling data from the U.S. Census Bureau and other reliable sources indicate the top .01% have not created even one net new job in over 40 years.

For decades, the overwhelming majority of all federal contracts were awarded to just .01% of all firms in America. These firms don’t create jobs, and 34% of these firms don’t pay federal income tax.

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