Update from Ranking Member Blaine Luetkemeyer: Biden’s Tax Increases, Backbreaking Policy for Small Businesses

Following a year of unprecedented state and local government shutdowns and regulations, and hampered demand due to COVID-19, small businesses are collectively starting to recover. With states opening and vaccines being distributed, the nation’s job creators are eagerly anticipating a return to operation without excessive government overreach.

However, just as America’s small business economy is starting to trend in a positive manner and small businesses regain their footing from COVID-19 lockdowns, the nation’s smallest firms are facing the next Biden overreach – Tax Increases.

Biden’s Waste and Tax Plan Shutters Hopes of Small Business Recovery

President Biden has pledged to REPEAL the Trump administration’s Pro-Business Tax Cuts and Jobs Act (TCJA)

  • The Trump administration’s lower taxes and reduced regulatory environment generated a small business economy that was filled with optimism and confidence
  • Small business owners were investing in their employees, their companies, and their communities
  • As a result, the nation saw historic levels of unemployment and job creation
  • Repealing the TCJA is a direct assault on small business and will crush their efforts to expand and hire

President Biden has proposed RAISING the corporate tax rate on ONE MILLION AMERICAN SMALL BUSINESSES

  • One million American small businesses are structured as a C corporation
  • 55 percent of C corporations have five or fewer employees and 85 percent of C corporations have 20 or fewer employees
  • Raising the corporate tax rate will send jobs overseas, increase utility prices, and cut paychecks for workers
  •  The global average corporate tax rate is 23.5 percent and China’s corporate tax rate is 25 percent
  • Under President Biden’s proposed increase to a 28 percent, corporate tax rate small business manufactures will be at a grave disadvantage to China and other offshore manufacturers
  • From decreasing wages to higher utility prices, an increase in the corporate tax rate will be backbreaking to small businesses and harmful to workers who will see a reduction in their paychecks and net income 

The elimination of the twenty percent deduction for pass-throughs will SHUTTER SMALL BUSINESS GROWTH

  • Any changes to marginal tax rates will discourage growth and innovation and will adversely impact the numerous small businesses categorized as pass-through entities
  • Despite deceiving claims that President Biden will not raise taxes on individuals making under $400,000, most American businesses file as individuals and could be seriously harmed by these tax increases
  • 95 percent of all business tax returns filed were from pass-through entities such as sole proprietorships, partnerships, LLCs, and S corporations
  • Higher rates will force small business owners to reconsider expanding their restaurant, investing in new manufacturing equipment, or hiring an additional craftsman to grow their business 

Increasing death taxes will

  • Eliminating the step-up in basis and requiring capital gains at the time of death threatens the future of family businesses and will penalize hardworking small businesses, farmers, and ranchers when they pass down their businesses to family members
  • These changes pose a direct threat to the American Dream