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Tax and Legal Playbook
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With a new president, there are always changes. While some of these ideas and proposals may sound ideal, they come at a cost and the government must decide how they will be paid for. Often, the government turns to businesses to help fund these initiatives through new policies or tax increases, but what many don’t realize is that small businesses can bear the brunt of these changes.
Small businesses are the backbone of America. In fact, according to the Small Business Administration, there are more than 30 million small businesses in the U.S., and comprising 99.9% of all U.S. businesses. Despite playing a key role in the economy, many of the proposed policies currently being discussed will harm small businesses in America. Let’s look at the first of many policies currently being discussed in Congress.
A push for unions
From the beginning of his campaign, President Biden declared, “I am a union guy.” So, it can’t be too much of a surprise that his American Jobs Plan, which supposedly is about infrastructure, includes the Protecting the Right to Organize (PRO) Act that was passed by the House earlier this year. The bill would expand various labor protections related to employees’ rights to organize and collectively bargain in the workplace. In fact, the fine print puts employees in a predicament. Currently, more than two dozen states have right-to-work laws in place that allow employees the option to opt out of unions and not pay their dues. Under the PRO Act, unions can override the decision to opt out and force employees to pay union dues despite not wanting to join them.
How are small businesses affected?
As with many new policies, huge corporations have the funds and teams to combat nearly any change that could potentially harm their business. On the other hand, small businesses often don’t have the financial ability to go up against the powers at be. The economy needs small businesses to not only survive but thrive in the post-pandemic world, and unions don’t help their bottom line. The PRO Act would make it difficult to hire independent contractors, force companies to subsidize union business, and would make it difficult to fire substandard employees.
Is the President pro-big business?
While Biden claims to support small businesses, many of the policies like the PRO Act penalize small-business owners while larger corporations walk away relatively unscathed. Small businesses can be fragile, and more regulations and restrictions on top of the recent pandemic closures could result in fewer and fewer successful small businesses. According to a new study by the Federal Reserve, an additional 200,000 businesses closed in the past year due to the pandemic. Successful small business owners are often lumped into the same category as billion-dollar corporations who can better absorb the increased costs.
We need small businesses to succeed now more than ever to continue to regain a strong economy. To do so, the public needs to understand the perspective of these business owners, including the struggles they’ve faced in the last year and Biden’s proposed policies that could devastate them. We’ll continue to discuss these topics and more in my next article on pandemic policies that fundamentally discourage small businesses.