Republican lawmakers claim President Joe Biden's $3.5 trillion investment package is a threat to small businesses.
Republicans in Congress are unanimously opposing President Joe Biden's $3.5 trillion investment plan, claiming its tax increases would devastate small businesses and cost the economy jobs. But a new report shows that only a tiny fraction of small businesses would actually see any tax increase under the proposal.
According to a Treasury Department analysis released Thursday, which examined small businesses that file as S corporations, partnerships, and individuals, just 3% of small business owners would be impacted by proposed tax increases. (The report did not assess the tiny percentage of small businesses that file as C corporations, meaning that they pay corporate taxes. The plan would raise the corporate tax rate from 21% to 28%.)
In past weeks, Republican lawmakers have issued dire warnings about Biden's plan.
"Biden's proposed tax plan will affect more than just large corporations," GOP Kansas Rep. Ron Estes warned in July. "In reality, 13,805 small business employers across Kansas will experience a tax increase. Businesses are still recovering from the pandemic – this is not how you help them."
"The Democrats' crippling tax hikes will raise taxes on 75% of middle-class families next year, destroy small business growth, shrink our economy and cut workers' wages and hours. Americans cannot afford to live in Joe Biden's America," predicted Rep. Stephanie Bice (R-OK).
However, the Treasury Department's analysis found that Biden's plan would raise marginal rates only on individuals making more than $452,700 in taxable income and jointly filing married couples making more than $509,300.
And while a few small businesses would pay more in taxes, much of the proposed $3.5 trillion in new climate, clean energy, health care, and caregiving infrastructure investments would directly help small businesses.
According to Small Business Majority, a network of more than 85,000 small businesses across the United States, investments in human infrastructure "are critical because small businesses need more support to ensure a successful long-term recovery from the pandemic, and to promote a more resilient workforce and economy."
The organization wrote to congressional leaders on Monday in support of the plan, citing more affordable health insurance, paid family and medical leave, and affordable child care as policies that would "bolster small businesses on their road to recovery and provide a boost to entrepreneurs and employees who need more support to fully participate in the workforce."
Still, every congressional Republican has opposed both the $3.5 trillion budget reconciliation plan and its provisions raising taxes on the very wealthy and businesses. GOP leaders called tax increases a "red line" they would not cross — even though Biden won the 2020 election on an explicit promise to enact them.
Polls have shown large majorities of Americans back the Biden plan, including a plurality of Republican voters.
Published with permission of The American Independent Foundation.