NFIB State Director Gil White’s column originally ran in The Exponent Telegram and other publications:
What a difference a year makes.
Just over 12 months ago, as a presidential candidate, Joe Biden promised he wouldn’t raise taxes on West Virginia small businesses. His exact words were: “No, taxes on small businesses won’t go up.”
Today, President Biden and members of his party are proposing the opposite through his “American Families Plan.” President Biden is calling for huge tax hikes that would hit many small businesses in West Virginia.
Fortunately, Senator Manchin will be in a position to stop these problematic tax changes on Main Street and our state as a whole.
Since the start of the year, Senator Manchin has proven himself to be one of the Senate’s best defenders of the small business community.
He proved it first by protecting the filibuster — the biggest bulwark to the most harmful legislation. He supported an amendment to prevent tax increases on small businesses during the pandemic and opposed an amendment to dramatically increase the federal minimum wage.
He’s proving it again through his leadership on the bipartisan infrastructure bill. That proposal has no small business tax hikes.
As that debate continues — and as the Biden Administration and Congress try to pass tax hikes in other ways — Senator Manchin is the last line of defense. He’s the Senate’s decisive vote. He has the ability to help West Virginia’s small businesses by voting no to damaging tax increases.
After the incredible challenges of the past year, the small business community is desperate for Senator Manchin to give them a helping hand, not kick them when they’re already down.
Talk to any small business owner, and you’ll probably hear that the coronavirus pandemic was devastating. Their sales were down, their employees were hurting, their communities were suffering, and their hopes of breaking even — or even staying open — were very much in doubt.
The worst of the pandemic is over, and small businesses are bouncing back. But President Biden’s proposed tax hikes would cause a whole new round of pain. This is one of the worst times to consider this idea.
What does President Biden want to do?
To start, he wants to raise taxes on corporations by 33% — a big hike. He thinks that corporations are all big businesses, but about a quarter of small employers are organized as corporations. They’re now looking at paying a third more in taxes, even though they need that money to hire and grow.
The other 75% of small employers aren’t corporations; they are organized as “pass-through” businesses, such as S-corporations, LLCs, sole proprietors, and partnerships.
The small business deduction allows qualified pass-through businesses to deduct up to 20% of their business income. The chairman of the Senate Finance Committee has proposed capping this small business deduction, which amounts to a big tax hike on them, too.
If it goes through, they’ll have as much as 20% less money to pass through to the business, their workers, and their communities.
President Biden has proposed a second death tax through repealing stepped-up basis. This would saddle family-owned businesses and farms with a new significant tax burden after the death of a loved one.
To be able to satisfy this proposed tax burden, family-owned businesses and farms may have to sell parts of the business or shut down altogether.
Only in Washington, D.C. could raising taxes on small business seem like a good idea in these difficult times. The results will be as predictable as they will be damaging.
Fewer jobs. Less investment in West Virginia’s future. Weaker communities. Unrealized dreams — for entrepreneurs and the entire state.
That’s a nightmare, no matter how you look at it. Senator Manchin can stop it from becoming a reality. He’s often had the back of small business, and right now, we need him to come through again.