Local Business Taxes, Regulations, and Reduced Workforce

Floor Speech

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Mr. FITZGERALD. Madam Speaker, the biggest tax increase for small business in over 50 years--let me say it again--the biggest tax increase for small business in over 50 years. This is what President Biden and my colleagues across the aisle are proposing in order to pay for part of their multi-trillion-dollar spending package.

The President and the Democrats have proposed a range of options that will hurt economic growth and fall on the backs of small businesses, like raising the corporate tax, raising the individual tax rates, taxing unrealized capital gains, and giving the IRS authority to spy on Americans' bank accounts.

In announcing the tax increases, the Biden administration said their agenda: ``Will protect 97 percent of small business owners from tax increases, while delivering tax cuts to more than 3.9 million entrepreneurs.''

But here is the problem. It doesn't add up. The statement doesn't add up. It doesn't hold up to the scrutiny. The reality is that approximately 1.4 million small businesses are structured as C corporations, meaning that they will be subjected to the proposed 28 percent corporate tax rate, as opposed to the current rate of 21 percent.

Let's talk about S corps. If you are not familiar with the S corp or the LLC, an individual small business owner's taxes flow through the S corp. So what is going to happen? They are going to increase the individual tax rate. What will that mean? S corps and LLCs will see an increase in the amount of taxes that they are paying.

Add in, as my other colleagues have already brought up this evening on Special Orders, rising inflation rates, increased cost of goods and services, shipping delays, labor shortages, and these small businesses will find themselves in a hole. They are trying to jump start themselves right now out of a pandemic, and we are going to tax them more? It makes absolutely no sense.

For nearly a decade, I was the owner of a small business. If you would have told me in 1990, when I started my small business, that I would be facing labor shortages, tax increases, and supply delays, guess what? I wouldn't have started a small business. You would be out of your mind to start a small business under those types of circumstances.

And guess what? We are seeing that happen in my home State of Wisconsin. The restaurant industry, gyms, manufacturers, construction companies, they are all struggling right now. If you are back in the district and you are talking to people and you are at a chamber meeting or you are at some type of specific association related to an industry, they will continue to tell you we are in trouble. Yet, the Biden administration and the Democrats are looking at tax increases on these small businesses.

We must give small businesses a chance to succeed. This trillion- dollar reconciliation package and the subsequent tax increases do just the opposite.

If my colleagues on the other side of the aisle truly want to save small businesses, they will drop the spending plan, cut taxes for small businesses, replenish the Restaurant Revitalization Fund, and drop the arbitrary vaccine mandate. That is what would get employees back to work.

These small-business owners deserve an opportunity to chase the American Dream. As it stands, this reconciliation package will take that opportunity away from them.

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