PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Small Business Group Opposes the $3.5 Trillion Tax and Spending Blowout Plan

By at 23 August, 2021, 12:59 pm

The tax and spending splurge will make running a small business much more burdensome, not ‘better.’

FOR IMMEDIATE RELEASE

Washington, D.C. – As the U.S. House begins to consider voting on the partisan $3.5 trillion budget resolution today, the Small Business & Entrepreneurship Council voiced strong opposition to the tax-and-spend blowout proposal. SBE Council president & CEO Karen Kerrigan stated the following:

“Small businesses and the economy remain in a fragile condition, and $3.5 trillion in new spending and taxes will not make conditions better. Taxing businesses at a time when they need all of their hard-earned capital to deal with inflation, labor shortages, disarray in the supply chain and the big surge in COVID-19 cases – which could soften demand further – will not help the economy ‘build back better.’ Massive government spending and new taxes will trigger great uncertainty among entrepreneurs, which will lead to less investment and job creation and more business closures.

“Small businesses are not even close to recovering from the effects of the Great Shutdown. They are still digging out. To hit many with new taxes and the added uncertainty that comes with this massive package is negligent and careless.”

As Kerrigan noted, McKinsey recently reported that it took an average of six years for small businesses to recover from the 2008-09 recession, and that it could take them even longer to recover from the pandemic. In fact, both small and large businesses needed significant time to recover from the great recession, and the effects of the Great Shutdown could test their resiliency even further. Not surprisingly, 65% of small business owners in a mid-July survey released by SBE Council and TechnoMetrica said that tax hikes should not even be on the table until the economy fully recovers.

“Democrats are rushing to jam this package through Congress, and there is great fear in the small business community that it will have unintended consequences beyond hitting many with higher taxes. The tax and spending splurge will make running a small business more burdensome, not better. We urge congressional Democrats and President Biden to take a more clearheaded approach to policy, especially now given the surge in COVID-19 variant cases and the unknowns yet to come in terms of where this pandemic will turn next.”

Small Business Confidence Down

A surge in COVID-19 cases and a threatening policy landscape is eating away at the confidence of small business owners. A Wall Street Journal/Vistage survey finds small-business confidence plummeting in August. Only 39% of small business owners expect economic conditions in the U.S. to improve in the next 12 months, which is DOWN from 50% in July and 67% in March. 

Related SBE Council Content:

TIPPS Insight Blog: Raising Taxes During a Pandemic: The Economic and Political Perils

Response to White House FACT SHEET on Small Business and Taxes: Biden-omics Fantasy: Increasing Taxes on Business is “Good” for Small Business

BAD IDEA: Raising Taxes While Economy Tries to Recover From a Pandemic, Small Business Insider.

5 Reasons Why Eliminating Stepped-Up in Basis Would be Very, Very Bad for Family Businesses, Small Business and the Economy, Small Business Insider.

Taxes at Death: Anti-Small Business to the Core, Small Business Insider.

Self-Employment a Path to Wealth Creation and the American Dream – PRO Act and STEP Act Erect Barriers, Small Business Insider.

Small Businesses Understand the Ills of Raising the Capital Gains Tax, Small Business Insider.

 

Updated August 24: Read or share SBE Council’s Letter to U.S. House Members here.

 

CONTACT:

Karen Kerrigan, kkerrigan@sbecouncil.org

Raymond Keating, rkeating@sbecouncil.org

SBE Council is nonpartisan advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. For 25 years, SBE Council has worked on and advanced a range of private sector and public policy initiatives to strengthen the ecosystem for strong startup activity and small business growth. Visit www.sbecouncil.org for additional information. Twitter: @SBECouncil

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