In the wake of a devastating pandemic and the resulting economic consequences, the United States has incurred a considerable amount of debt in order to “Build Back Better,” as President Joe Biden likes to say.
On a positive note, the federal programs financed by this debt have helped millions of small businesses stay open and allowed many more Americans to continue receiving a paycheck. But as Congress now looks to spend even more to improve our nation’s crumbling infrastructure and to strengthen our “social infrastructure,” it must confront the question of how to pay for it all.
One idea should be taken out of the list of options. H.R. 1068 and S. 1598 are extreme proposals intended to “soak the rich” by increasing taxes on small business investments. Some members of Congress want to include legislation like this in the $3.5 trillion American Family Plan. Only it won’t soak the rich – it will end up hurting the very small businesses that need help the most. I hope you will join me in opposing these efforts.
This Small Business Investment Tax would have a chilling effect on new private investment in small employers. About 14,000 small businesses rely on the private investment that would be subject to this tax increase; investments that support almost 12 million American jobs and contribute $1.4 trillion to the U.S. economy.
We’re not talking about big conglomerates here. Rather, these are the kinds of businesses that enrich our communities and grow our economy. Eighty-six percent of businesses that benefit from this kind of private investment employ 500 workers or fewer. A third of them employ 10 or fewer.
A wide range of industries will feel the effects of a tax like this; real estate, hotels, restaurants, manufacturing and other foundational job providers need the investment capital that is in the crosshairs of Congress.
It is no surprise that the many major business organizations and their members are speaking up about their concerns. Below is just a sample of those groups who see this proposal as a serious concern:
- United States Chamber of Commerce
- American Hotel and Lodging Association
- American Resort Development Association
- American Seniors Housing Association
- Asian American Hotel Owners Association
- Building Owners and Managers Association (BOMA) International CCIM Institute
- Institute of Real Estate Management
- International Council of Shopping Centers
- Mortgage Bankers Association
The stated goal of the American Rescue Plan and the American Family Plan is to rebuild our economy stronger than ever. Tax increases that punish investment in small businesses are contrary to this idea. Therefore, Maine’s members of Congress must oppose this legislation in its current form.