As Congress considers the Build Back Better Act’s tax increases and mandates for small businesses, NFIB members are speaking out on how proposed tax increases would hurt their ability to operate, survive, and thrive.
In a congressional hearing last week, NFIB member John Sullivan, president of Dana Wallboard Supply in Massachusetts testified before Republican members of the U.S. House Ways and Means Committee about the proposed tax increases on small businesses being considered in the Build Back Better Act.
Specifically, they discussed the “Small Business Surtax,” a 3.8% tax that will impact businesses organized as s-corporations, LLCs, sole proprietorships, and partnerships on all income over $400,000, and family-owned businesses that use a trust or estate to pass the family business on to the next generation (a threshold of only $13,000).
Sullivan said in his testimony, “The most important thing is to take care of my people. We have the prospect of an additional 3.8% tax over $400k. Small businesses like us can’t absorb an additional tax increase and we can’t pass this on to customers. If we get hit with what is being proposed, I cannot continue to pay bonus or contribute to 401k plans like we do today.”
Beth Booth, an NFIB member and owner of Spaces Renewed in Southern California spoke out recently in a video for NFIB’s In Their Own Words video series. Booth owns the business with her husband and employs 15 people in the construction and design industry. Booth explains that her business has used the Small Business Deduction (IRS Section 199A) to hire local small businesses to assist with marketing and creative efforts: “All of these businesses depend on us…Spaces Renewed is a great source of income for them and so as we keep that money, we’re dispersing it into our local economy here. We aren’t keeping it; it’s going out into all of these other small businesses.”
Curtailing the Small Business Deduction would directly hurt small businesses’ ability to hire, invest in their business, increase employees’ compensation, and threatens the fragile small business economic recovery.
The latest video in NFIB’s In Their Own Words series features Iowa small business owner Cary Coppola. Coppola is CEO and Co-founder of Blue Compass, a digital marketing company in Des Moines. He explains how tax increases would be harmful to many small businesses, especially when other business expenses are increasing.
Coppola says, “So when it comes to taxes and increases of taxes, I understand there’s a lot of good policies out there that take money to implement. But this specific time in our history when small businesses, many of them weren’t fortunate enough to make it through 2020, let alone barely scraped to get by, it just seems like everything we’ve done everything we’ve asked for, been asked of us. We fought to stay afloat. We’ve fought to keep our employees employed.”
To join in the fight to stop the Build Back Better Act’s small business tax increases and mandates, please take a moment to tell your U.S. Senators and Representative your concerns about the bill’s Small Business Surtax, increased penalties, or inflexible mandated Paid Family and Medical Leave Program.