WASHINGTON, D.C. (Dec. 8, 2021) – NFIB member John Sullivan, president of Dana Wallboard Supply in Massachusetts testified yesterday before Republican members of the U.S. House Ways and Means Committee about proposed tax increases on small businesses.
Specifically, the Republican members 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 (threshold of only $13,000).
Mr. 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.”
Another witness, Chris Axene, a certified public accountant, echoed Mr. Sullivan’s comments: “The reason my partners and I are concerned about this provision stems from the fact that being taxed on income and having the cash flow that generated the income in which to pay the tax are often at odds with each other…The vast majority of our clients must reinvest the cash flow back into their businesses in order to continue to grow. This reinvestment often comes in the form of investment in people, equipment, real estate, and raw materials. All things that help to spur the larger economy.”
NFIB launched the Small Business Survival campaign, a coordinated advocacy effort that includes targeted traditional and digital advertising, media initiatives, research, grassroots, lobbying, and other efforts that will highlight why tax increases would be harmful to small businesses while holding members of Congress accountable for their support of the tax hikes and mandates.
More information about the Small Business Survival campaign can be found here: NFIB.com/SmallBizSurvival.
