During this fragile economic recovery, Main Street needs protection from tax hikes that would take away from crucial wages and benefits, and affordable customer pricing in favor of higher tax payments to the government. Small businesses are always at a disadvantage when it comes to weathering massive government mandates, and that is especially true now with Congress and the White House considering small business tax increases to pay for the Administration’s agenda.
In response to the Administration’s preliminary tax and spending proposals, NFIB President Brad Close urged Congress and the White House not to harm small business job creators:
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 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.”
– Brad Close, President NFIB
What’s been proposed:
The Administration’s American Jobs Plan – over $2 trillion in spending – would affect small businesses in two significant ways:
- A Big Labor threat. In the American Jobs Plan, President Biden calls on “Congress to ensure all workers have a free and fair choice to join a union by passing the Protecting the Right to Organize (PRO) Act, and guarantee union and bargaining rights for public service workers.” This legislation has been rejected by the courts and opposed by Congress for decades. You can click here to ask your members of Congress to stop the harmful PRO Act.
- A tax rate hike for approximately 1 in 4 NFIB members. Small businesses organized as C-Corps would see their tax rate increase to 28%. America’s small businesses are the third largest economy in the world and absorbing a dramatic tax increase would mean job losses, increased prices and business closures. To help us stop this bad tax policy, please consider taking a moment now to urge your lawmakers to let small businesses recover from the pandemic without the added difficulty of tax hikes.
In the next couple weeks, the Administration is expected to propose an additional layer of “human infrastructure” spending, reported to address “domestic priorities, such as universal prekindergarten, national childcare, and free community college tuition.” This proposal is expected to be funded by additional tax increases on small businesses and individuals, including:
- An attack on the Small Business Tax Deduction. The Administration is reportedly aiming at the 20% tax deduction that most small businesses benefit from. To know if you receive the Small Business Deduction, check line 13 on your 2020 IRS Form 1040. NFIB secured the Small Business Deduction in the federal tax code in 2017 and it means a lot to small businesses, their employees and their communities.
- Broader reach for the Death Tax. NFIB is working to stop the Death Tax, while the Administration’s agenda is expected to expand the tax. For small business owners, the Death Tax can mean that once they pass away, their business may be severely impacted or even forced to close. You can help in the fight to repeal the Death Tax here.
- And more. This second wave of the President’s infrastructure spending plan is also expected to raise the income tax rate on individuals earning more than $400,000 and increase the capital-gains tax rate for certain individuals.
Next, Congress will begin crafting legislation to align with the Administration’s proposal and may expand it further. NFIB will continue to monitor and fight for the interests of NFIB members, and you can help. We’re working to educate Congress on how the Small Business Deduction has helped your business survive. How would a tax increase impact your business, employees or community? Submit your story here.