Tax Increases: Tell Congress It’s The Wrong Time And The Wrong Policy For Main Street
Small business owners work hard to make the most of often-slim margins, with little flexibility to absorb additional government mandates, taxes, and regulations. The issue of taxes remains a top concern for small business owners and has been noted repeatedly in NFIB’s Small Business Problems and Priorities surveys throughout the decades. Now, with Congress and the White House discussing tax increases to pay for their legislative agendas, small business owners are speaking out.
NFIB member Lana Pol, a small business owner in Iowa, used the Small Business Deduction tax relief that began in 2017 to give her employees raises and improve their benefits. If that tax relief is eliminated, the future of small business job creation, economic recovery, and growth, is at risk.
By the numbers: America’s job growth and economic recovery depend on small businesses’ ability to thrive and grow. According to the Small Business Administration Office of Advocacy, small businesses make up 99.9% of the U.S. employer businesses. From 2000 to 2019, small businesses created 10.5 million net new jobs while large businesses created 5.6 million. Small businesses account for 65% of net new job creation in that period.
As the White House and Congress consider raising taxes, now is the time to urge them to keep small businesses in mind when considering any changes to the tax code. The Administration has offered a few details for a future infrastructure proposal, financed by tax increases, including raising the corporate tax rate from 21% to 28%. We are expecting additional tax increases to be announced, including:
- Scaling back the Small Business Deduction (section 199A)
- Raising the income tax rate on individuals earning more than $400,000
- Expanding the estate tax’s reach
- Increasing capital-gains tax rate
In response to President Biden’s tax plans announced yesterday, NFIB President & CEO Brad Close said, “Any plan by President Biden and Congress must take into account the crucial role Main Street plays in job creation and economic growth. America’s small businesses are the third largest economy in the world, and they have been severely harmed by the pandemic and government shutdowns. We are reviewing today’s proposals and look forward to seeing the details in the actual legislation. We recognize this is only ‘round one’ and will remain steadfast in opposing any tax hikes that could hurt the efforts of small businesses to keep their doors open and their employees on payroll.”
New Tax Relief: Don’t Miss New Tax Credits Up to $33,000 Per Employee
Extended COVID-19 recovery tax relief is also available to support businesses working to survive and recover through the pandemic and government-mandated shutdowns. Leading the pack yet under-used is among the pandemic financial assistance programs is the Employee Retention Tax Credit (ERTC). The ERTC offers eligible small business owners up to $33,000 per employee in tax credits. Our next webinar will take place Wednesday, April 14 and offer clear step-by-step guidance on ERTC.