Small business owners have always had it tough — making payroll, dealing with customers, and of course, writing a large check to Uncle Sam at the end of the year — but this year inflation is making things particularly hard. Yet somehow, Senate Democrats think kicking these people while they’re down is a good plan.
There’s growing traction among Senate Democrats to put in place a new tax on pass-through entities to help pay for Biden’s Build Back Better plan. While advocates claim that expanding the small business tax is “closing loopholes,” the reality is that this would result in a tax increase on the vast majority of Main Street shops. According to the Tax Foundation, over 90% of American businesses are set up as pass-through entities. That is, income is reported on the tax return of the business owner, rather than paying a separate corporate rate.
This new tax would hurt small businesses that are already struggling under current record levels of inflation. It’s a horrible plan.