NFIB members are fighting against new taxes, and against adding complicated regulations for data privacy

NFIB members are fighting against new taxes, and against adding complicated regulations for data privacy

In Congress, NFIB and small business owners are following and speaking out on two separate issues in the last few weeks. Not only have there been recent talks about a new small business tax, but there was also a recent bill addressing data privacy regulations on small businesses. The current economic challenges are already hurting small businesses but adding any new taxes or complicated regulations will only add to the challenges of Main Street. Below are two recent legislative provisions that would impact small business, explained:

New Small Business Tax Considered for Massive Congressional Spending Bill

In early July, the U.S. Senate proposed adding a new tax on pass-through businesses, wrongly characterized as closing a “loophole” to help fund Medicare. NFIB members spoke out against this new tax in a video, and NFIB launched a multi-state paid advertising campaign to urge members of Congress to stand against the new tax.

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WASHINGTON, DC (July 18, 2022) – The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, announced today a multi-state paid advertising campaign including radio ads in Arizona and West Virginia. The ads encourage voters to urge Senators Kyrsten Sinema and Mark Kelly in Arizona, and Senator Joe Manchin in West Virginia, to stand against the new proposed small business tax and any tax increases on small businesses.

Members of the U.S. Senate are wrongly characterizing the proposed legislation as the closing of a “loophole” or “funding Medicare,” but it is in fact a tax increase on small businesses.

Listen to the Arizona radio ad here: https://youtu.be/n8It1tVK374

Listen to the West Virginia radio ad here: https://youtu.be/9usR6VigvV4

“Main Street cannot afford these new tax increases,” said Kevin Kuhlman, NFIB Vice President of Federal Government Relations. “Small business owners’ optimism has declined for six consecutive months and their expectations for better business conditions are at an all-time low. These proposals would hurt the small business recovery, impose unaffordable tax increases, and make top issues like inflation even worse. NFIB encourages Senators Sinema, Kelly, and Manchin to oppose any tax increases on small businesses.”

The sheer number of Unemployment Insurance (UI) claims early in the pandemic overwhelmed administrative agencies, leading to many overpayments. While many of these were the result of simple administrative error, others were deliberate cases of fraud. As the cost of these claims ultimately falls on businesses, it’s crucial for state and federal governments to crack down on UI fraud.

In June, the Government Accountability Office (GAO) declared that the U.S. unemployment insurance system will be added to their list of federal areas with a “High Risk” for waste, fraud, abuse, and mismanagement after it was discovered that tens of billions of dollars were defrauded from the UI system. A new report from the GAO revealed that the Department of Labor “reported an increase from $8.0 billion (9.2% improper payment rate) for fiscal year 2020 to $78.1 billion (18.9% improper payment rate) for fiscal year 2021.” In other words, when the pandemic started, the improper payment rate more than doubled.

“Small business owners are already battling a series of economic headwinds and increases in Unemployment Insurance taxes or expenses stemming from fraud are a serious concern,” said NFIB State Government Relations Vice President Tim Goodrich. “NFIB is fighting for policies that would stop these fraudulent and unnecessary expenses from impacting small businesses.”

New NFIB Video: My Small Business is Not a Tax Loophole

WASHINGTON, D.C. (July 19, 2022) – The National Federation of Independent Business (NFIB) released a new video today highlighting small business owners’ concerns about a new tax on small businesses that has been wrongly characterized as a closing of a tax loophole. The new tax is on small businesses, which legislators wrongly claim will “close a tax loophole to fund Medicare.” However, the tax isn’t a loophole and small businesses already pay for Medicare through payroll taxes and self-employment taxes.

The video features small business owners Laura Lucia of New York, Neil Abramson of Massachusetts, Eddie Wetherill of North Carolina, Kellie Loudin of Ohio, and Loren King of Indiana. They each expressed concern about the new tax and the impact it will have on their business... Click here to read the article.

WASHINGTON, D.C. (July 12, 2022) – The NFIB Small Business Optimism Index dropped 3.6 points in June to 89.5, marking the sixth consecutive month below the 48-year average of 98. Small business owners expecting better business conditions over the next six months decreased seven points to a net negative 61%, the lowest level recorded in the 48-year survey. Expectations for better conditions have worsened every month this year.

Inflation continues to be a top problem for small businesses with 34% of owners reporting it was their single most important problem in operating their business, an increase of six points from May and the highest level since quarter four in 1980.

“As inflation continues to dominate business decisions, small business owners’ expectations for better business conditions have reached a new low,” said NFIB Chief Economist Bill Dunkelberg. “On top of the immediate challenges facing small business owners including inflation and worker shortages, the outlook for economic policy is not encouraging either as policy talks have shifted to tax increases and more regulations.”

NFIB Inflation Survey: Large Majority of Small Business Owners Report Inflation Pressures Worsening

WASHINGTON, D.C. (July 19, 2022) – The NFIB Research Center released a new survey today assessing the impact inflation is having on small businesses. Overall, over half (56%) of small employers reported that inflation is having a substantial impact on their business while about a third (35%) reported a moderate impact. Three quarters (75%) of owners reported that inflation pressure is getting worse, a quarter (25%) reported about the same, and 1% reported it easing up.

“Inflation has set in on Main Street and owners across the country continue to make business decisions in response,” said Holly Wade, Executive Director of NFIB’s Research Center. “As owners manage the highest inflation rate in decades, they are also managing an ongoing worker shortage and supply chain disruptions, which is hurting their businesses and consumers.” Read more...

WASHINGTON, D.C. (July 13, 2022) – The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, released the below statement in response to the Consumer Price Index’s inflation rate for June reaching a staggering 9.1 percent:
“Inflation remains the top problem for the small business economy, and there seems to be no end in sight,” said Kevin Kuhlman, NFIB Vice President of Federal Government Relations. “Small business optimism has declined for six consecutive months and expectations for better business conditions are at an all-time low. Congress must not increase the pain and uncertainty that Main Street is feeling by proposing a new tax on small businesses that would raise costs and threaten jobs. We urge Congress to act against inflation and reject any tax increases on small businesses.”

Supreme Court ruled on cases regarding the vaccine mandate, arbitration, and more

WASHINGTON, D.C. (July 6, 2022) – The U.S. Supreme Court decided several cases this term that will have an immediate positive effect on small businesses throughout the country. NFIB represented the small business community in five cases. NFIB was the lead plaintiff in the vaccine mandate case, NFIB v. OSHA, and filed amicus briefs in four other cases.

“From the vaccine mandate to arbitration cases, small businesses had a successful term at the Supreme Court,” said Karen Harned, Executive Director of NFIB’s Small Business Legal Center. “The courts are fundamentally the last line of defense for small businesses regarding government overreach, burdensome regulations, and costly mandates. The cases decided this term will benefit small businesses across various industries.”

WASHINGTON, D.C. (June 30, 2022) – The National Federation of Independent Business (NFIB) commends today’s United States Supreme Court decision in the case West Virginia v. Environmental Protection Agency. The Court agreed to reverse the lower court’s decision, which drastically increased the Environmental Protection Agency’s (EPA) authority to address climate change without clear Congressional approval. Contrary to the lower court, the Supreme Court held that Section 111 of the Clean Air Act did not give EPA authority to transform the nation’s electricity grid, and that such a decision must come from Congress itself or an agency acting upon a “clear delegation” from Congress.

“Small businesses are relieved with today’s decision from the U.S. Supreme Court,” said Karen Harned, Executive Director of NFIB’s Small Business Legal Center. “Energy costs are a large expense and a top concern for small businesses. The Supreme Court made the correct decision today by reining in the EPA’s overreach and requiring clear Congressional approval for expansive regulations affecting the entire energy industry.”

NFIB filed an amicus brief in the case arguing that the EPA needed clear authorization from Congress before imposing costly and significant regulations on the energy sector...

NFIB President Brad Close wrote a new op-ed in Fox Business explaining how Congress can help Main Street fight inflation. Last week, the Bureau of Labor Statistics report on the Consumer Price Index reported inflation is near a 40-year high. Close explains that inflation is the number one problem facing small businesses right now, as reported in NFIB’s monthly survey.

“Small businesses are counting on Washington to help address this crisis, but instead of solutions, all they hear are bad ideas that will make current problems even worse. Congress and the Administration are still pushing the Build Back Better Act legislation, with its massive tax increases that would take more money that small businesses need to grapple with high inflation and supply chain bottlenecks.”

“Only in Washington does it make sense to saddle the small business economy with new taxes and mandates. What’s really needed are policies that would grow and strengthen Main Street. If Congress doesn’t have any good ideas, they should look to the states for pro-growth solutions.”

CNBC (4/12, Cox) reported that because of the “surge” in inflation, “real earnings, despite rising 5.6% from a year ago, weren’t keeping pace with the cost of living. Real average hourly earnings posted a seasonally adjusted 0.8% decline for the month, according to a separate Bureau of Labor Statistics report. The inability of wages to keep up with costs could add to inflation pressures.”

The AP (4/14, Wiseman) reported that first-time claims for jobless benefits rose 18,000 last week to 185,000, according to Department of Labor data released Thursday, but “remained at a historically low level, reflecting a robust U.S. labor market with near record-high job openings and few layoffs.” The four-week moving average, which irons out week-to-week volatility, rose 2,000 to 172,000.

The Wall Street Journal (4/16, Mitchell, Subscription Publication) reported new research shows 3 million Americans who quit work during the coronavirus pandemic do not plan to return to pre-pandemic activities even after all restrictions are lifted. According to researchers, these people tend to be women, lack a college degree, and work in low-paying jobs. Th Journal warned that the persistence of “long social distancing” means the labor force is unlikely to bounce back to pre-pandemic levels.

Reuters (4/11, Warburton) reported House Democrats on Monday “proposed legislation requiring employers give their workers paid time off to vote, following failed attempts by Congress to pass major voting rights legislation earlier this year.” In a statement, Rep. Nikema Williams (D-GA) said that the “Time Off to Vote Act” would help states reduce lines at polling places, while Rep. Andy Levin (D-MI) said it would “ensure no worker has to sacrifice their wages or jeopardize their job security to exercise their sacred right to vote.”

The Wall Street Journal (4/7, Rubin, Subscription Publication) reported that the Labor Department said last Thursday that initial jobless claims fell to 160,000 during the week that ended April 2, compared to a revised 171,000 the week before. It was the lowest weekly total since November 1968, when the labor force was less than half the size it is now.

Reuters (4/7, Mutikani) said the numbers are “indicating a further tightening of labor market conditions...which could contribute to keeping inflation elevated.” The decline in claims is at “a more than 53-year low” in part due to “a revision of the seasonal factors.” Nationally, “big declines in claims in Michigan and Texas...offset increases in California, Ohio and Pennsylvania.”