Democrats’ $3.5 trillion expansion of government and tax hikes will devastate small businesses as they struggle to come out of a pandemic and government-mandated shutdowns. As President of the National Federation of Independent Business (NFIB) Brad Close writes:
KEY EXCERPTS:
- “The tax hikes would fund a massive $3.5 trillion expansion of the federal government, but they couldn’t come at a worse time for small businesses. You’d think the White House would know this. After all, in its proclamation for Small Business Week, the administration noted that the pandemic hit small businesses hard.”
- “Washington’s response has often made it harder, most notably leading to huge numbers of unfilled jobs. Add floundering supply chains and it’s painfully clear: The answer to these problems is not a massive revenue grab by the federal government.”
- “Small businesses aren’t just looking at one or two tax hikes under the proposed plan. They’re looking at a slew of tax increases that would hit them from every angle:
- The small business deduction would be capped. This game-changing policy gives small businesses unprecedented relief. But now Congress wants to limit eligibility, hurting small businesses that invest in jobs and equipment.
- Estate taxes would be raised. The current exemption would be cut in half, exposing more small businesses and family farms to huge tax bills when loved ones pass away. Some may be forced to liquidate to pay it.
- Capital gains taxes would be raised. The hike, from 23.8% to 28.8%, would mean less money to invest in the business, to offer wage hikes to workers and to give back to communities.
- Small business income taxes would be raised. There’s a 8% surtax specifically targeted at small businesses. It’s a clear-cut attempt to take more money from the businesses that can least afford it”
- “If these tax hikes and mandates go through, the damage will be severe and long-lasting. The country may recover in time, but countless small businesses won’t live to see it.”
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KEY TAKEAWAYS:
Millions of Main Street Businesses Will Shoulder the Burden of Dems’ Tax Hikes.
- The majority of the more than 30 million small businesses in the U.S. are pass-through entities in which tax obligations are passed to the owners. Pass-through businesses also account for over half ofall private sector workers. More than half of all pass-through income would be taxed at this new, higher rate.
- Democrats are expanding the death tax to hit more small businesses – and to take more from them. This trojan horse for a supercharged second death tax will force family-owned businesses to sell off assets to pay a massive tax bill to the IRS. These tax changes will cost 1 million jobs over the long term.
- The Biden Administration has claimed that the majority of small businesses will be exempt from his tax hikes – but the Tax Foundationhas said that’s “misleading.” In fact, almost 900,000 small businesses could be hit with Democrats’ limitation of the passthrough deduction based on 2018 IRS data.
- Senate Democrats want to eliminate the small business deduction, which 21 million small businessesrelied on in 2019 to invest, hire new workers, and increase employee benefits.
READ: Brady Fact Checks Dems’ False Claims on Their Crippling Tax Hikes
Democrats’ tax hikes hit working families, especially the Middle Class.
- The non-partisan Joint Committee on Taxation (JCT)found that workers will shoulder the burden of the tax hikes and that within 10 years of a corporate tax increase, two thirds of the corporate tax burden would be borne by lower- and middle-income taxpayers.
- In addition to shipping U.S. jobs overseas, the non-partisan JCT foundthat 25 percent of the burden of Democrats’ tax hikes would be borne by working Americans in slashed wages.