PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Letter to U.S. House Points Out Small Business and Economic Harm of Manchin-Schumer’s IRA

By at 11 August, 2022, 8:38 am

NEWS

For Immediate Release

Washington, D.C.  – Today, the Small Business & Entrepreneurship Council (SBE Council) delivered a letter to U.S. House members in opposition to the “Inflation Reduction Act” (IRA). In the letter, SBE Council president & CEO Karen Kerrigan warned that the title of the legislation belies what it will actually do and small businesses will be harmed by provisions that inhibit investment and innovation. As Kerrigan notes in the letter, with productivity plunging, inflation still stirring, business investment tumbling, and real personal income in decline, President Biden and Congress need to be doing all they can to support private business investment and growth in order to boost wages, job growth and heal supply chains:

“The ‘IRA’ hardens government control over key areas of the economy and siphons private capital from productive businesses. This is not legislation that will help our businesses navigate through relentless inflation, supply chain headaches, the great labor mismatch, and an economy in recession.”

Kerrigan also pointed out that as much as politicians wish it were the case, they cannot cordon off the effects of tax increases on big corporations or certain industries:

“The effect of the tax increases on big businesses will make their way down to small businesses, as larger companies cut orders with small-business suppliers. Layoffs and the reduction of worker hours means less money will be spent with local businesses. As much as politicians romanticize about the fairness associated with big-business tax hikes, the fact is you cannot wall off their effects. The business ecosystem is highly interconnected and interdependent. What impacts big business, impacts small business and vice versa. It is disingenuous to claim ‘only big businesses’ or only targeted sectors will take a hit with these tax increases – whether it’s America’s biggest companies, the energy sector, or the bio-pharmaceutical industry – the downstream impact is harmful for our economy, workers and small businesses.”

Moreover, beyond the tax provisions aimed directly at small businesses – such as the limitation on “pass-through” businesses to claim losses for two years without extending the 20% small business deduction, Kerrigan wrote that providing vast new resources to the Internal Revenue Service (IRS) without reforming questionable practices and poor taxpayer service that have plagued the agency, is only a winning policy formula for extending bad practices that are not in the interest of small-business taxpayers:

“While supporters of the ‘IRA’ claim the vast resources provided by the bill will go after wealthy taxpayers, tax data consistently shows that small business owners of moderate means are targeted most frequently. Obviously, this will be a burden on many small business owners who will be forced to endure expensive and lengthy audits. Resources would be better spent on helping small businesses – and all taxpayers – comply through taxpayer assistance (or better yet – simplify the tax code!) Yet, only a tiny fraction – 4% – of the $80 billion proposed in the ‘IRA’ is dedicated toward assistance.”

SBE Council is urging U.S. House members to oppose the legislation.

CONTACT:

Karen Kerrigankkerrigan@sbecouncil.org

SBE Council is nonpartisan advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. For 28 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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