“Our Nation’s small businesses define our communities, drive innovation, and create the products and services that enrich our lives and solve global problems to build a better and more sustainable world,” President Biden declared in a September 10th proclamation highlighting American small businesses.
Does the Biden administration have small business interests in mind? Absolutely not.
The Biden administration claims 97 percent of small business owners won’t see tax hikes under the president’s “Build Back Better” agenda. The Tax Foundation, however, countered, “By focusing on the number of people, the Biden administration is misleadingly claiming their tax proposals would have a small effect. The actual statistics show more than half of pass-through business income could face tax increases.”
On National Small Business Week, beware of double speak by those perpetuating the War on Small Business.
The $3.5T Reconciliation Bill Will Hurt Small Businesses
“Look, I don’t want to punish anyone’s success, but the wealthy have been getting a free ride at the expense of the middle class for too long,” President Biden tweeted in support of the $3.5 trillion budget reconciliation plan. “I intend to pass one of the biggest middle class tax cuts ever — paid for by making those at the top pay their fair share.”
Unfortunately for us, this bill contains provisions that’ll hurt all income brackets—especially small business owners.
For instance, Democrats intend to raise the federal corporate income tax from 21% to 26.5%. Americans for Tax Reform (ATF) explained this move won’t just affect wealth creators; it’ll also threaten life savings and result in small business owners paying higher utility bills. Moreover, Biden’s proposal will result in “limiting the 20 percent small business deduction, expanding the Obamacare net investment income tax, limiting the ability of passthroughs to deduct excess business losses, and raising the corporate tax rate.”
Other nefarious components that’ll stifle small business creation and entrepreneurship—including PRO Act labor provisions and the Internal Revenue Service (IRS) requiring financial institutions to report customer data for tax collection purposes for inflows and outflows exceeding $600— are also found in the plan.
Furthermore, the bill will eliminate the step-up basis for the capital-gains tax benefitting family farms. Craig Hill, Iowa Farm Bureau president, wrote in WSJ:
The effect of this policy isn’t going to be felt by wealthy investors or real-estate moguls. It will be felt by the farmer who relied on the land for retirement and the young farmer who wants to start his or her own farm legacy but can’t afford the tax bill.
And that’s barely scratching the surface.
Small Business Advocates Sound the Alarm
Small business advocates have lambasted central planners in Washington for exploiting the COVID-19 pandemic to further hinder small business recovery.
“Despite the lip service on how important small businesses are, they are consistently targeted with politically-generated barriers that make it more difficult for them to compete with their bigger, clout-holding competitors,” wrote Carol Roth, author of The War on Small Business, in an email to Townhall.com. “From contending with government mandated shutdowns, to a huge supply and demand imbalance in labor and a broken supply chain resulting from government intervention into the market, small business is shouldering an outsized burden that has already killed hundreds of thousands of entities and threatens the survival of millions more. Additional policies from increased taxes to the PRO Act demonstrate that [the] government finds small business more inconvenient than worthy of support.”
Job Creators Network, a nonpartisan organization originally founded by Home Depot co-founder Bernie Marcus, announced yesterday it was suing the Biden administration over its vaccine mandate affecting companies boasting over 100 employees.
"President Biden's vaccine mandate on small businesses is unconstitutional and a dramatic overreach of federal authority," Alfredo Ortiz, CEO and president of the Job Creators Network (JCN) said to Fox News. "To hold the Biden Administration accountable and stand up for small businesses, Job Creators Network plans to file a lawsuit to block the implementation of this order.”
Conclusion
“Small business is called the backbone of the economy for a reason—small businesses comprise 99.9% of all business entities, and account for around half of the GDP and employment, and in recent (pre-COVID) years, the majority of jobs created,” added Roth. “They provide a decentralized opportunity for economic freedom and wealth creation that impacts tens of millions of entrepreneurs in the U.S., as well as their employees and communities. This, in turn, benefits the consumer in ways ranging from innovations that improve their lives to more choice for goods and services.”
Carol is right. Sadly, it’s hard to find true defenders of free enterprise in Washington today.
Those perpetuating the War on Small Business, including the sitting President, must be blocked from inflicting more pain onto Main Street.