Gallup: Small Business Ranks #1 with Public. So, Where’s the Policy Love from Washington?

By at 30 July, 2021, 7:03 am

By Karen Kerrigan –

Once again, small business grabbed the number one spot when it comes to Americans’ confidence in institutions. In a blog post, SBE Council chief economist Ray Keating covers the findings of Gallup’s annual survey, which I also discussed on a recent Growth Without Barriers podcast.

On the podcast, I reviewed specific policies in Washington that do not reflect this love and respect for small business. For example, the small business community is very concerned about the nomination of David Weil as Wage and Hour Administrator at the Department of Labor (DOL). Weil has expressed his dislike for independent contractors, the franchise model, and the gig economy through previous actions at the DOL under President Obama and in his writings. SBE Council joined small business allies and signed a letter to Senate leaders opposing the nomination.  The Weil nomination will be taken up soon by the Senate HELP Committee.

The HELP Committee in general has not been helpful for small businesses when it comes to policy and legislation. In a July 24 Growth Without Barriers podcast, I talked about the incessant push to pass the PRO Act, which would outlaw many independent contractors (forcing them to become employees) abolish state Right to Work laws, and gut the privacy of workers in labor union efforts to organize workplaces.

Senate Democrats are aiming to tuck all or pieces of the PRO Act within the $3.5 trillion spending “reconciliation” package, likely within an unemployment insurance (UI) title aka the Wyden-Bennet bill.

As I note in the podcast, in states that comply with Wyden-Bennet and adopt the California test, small businesses that use independent contractors would be on the hook for higher taxes, as they would be required to pay federal unemployment taxes going forward for nearly every independent contractor they use. In states that decline to adopt the test, every employer – small and large – would see their federal unemployment tax bill go up 5.4 percent per employee, as employers would no longer be eligible for the federal tax credit reduction.

Wyden-Bennet raises taxes on small businesses, and so would the $3.5 trillion package, which would be a massive blow to small businesses as they are struggling to recover from COVID’s economic hit while operating under other significant headwinds such as labor shortages, the inflation hit, and supply chain issues.

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council.




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