Washington, D.C. – In an op-ed published by the New York Post, House Republican Leader Kevin McCarthy (CA-23) called for Congressional Democrats to abandon their tax-and-spend legislation that will increase inflation, reduce the real wages of America’s workers, and shutter America’s small businesses.
The Democrat Assault on America’s Small Businesses
New York Post
Republican Leader Kevin McCarthy
September 28, 2021
Thousands of America’s small businesses are teetering on the edge of having to permanently close, and the Democrats in Washington are about to give them one final shove. With those closures will come the fraying fabric of our communities and the permanent loss of good jobs for hard working Americans across the country.
Over the last several months, small businesses persevered the best they could, holding on until these “temporary” welfare programs driving people away from working expired. But if there was any doubt left that Democrats’ ultimate goal was not a temporary boost to Americans most impacted by Covid-19 but rather a calculated step towards government control and socialism, their proposed $4.3 trillion tax and spend bill removes it all.
Walk down any main street or city avenue in America today and you’ll likely see sign after sign with help-wanted pleas, hiring incentives, or apologies in advance for shortened hours and delayed service due to staff shortages. This reflects the fact that there are nearly 11 million job openings across the country and that our small businesses are trying to get back on their feet after the crushing government-imposed lockdowns.
But where are the workers? The short answer is the Biden administration is more interested in handouts that pay more, or just as much, to stay home than go back to work. Since taking office, President Biden and congressional Democrats have prioritized big government over earned pay stubs.
The Democrat tax and spend plan won’t solve this problem. The proposal includes an elimination of the child tax credit as we know it, replacing it with welfare without any work requirement. Republicans believe the family is the foundation of a strong society, which is why we have supported expanding the child tax credit in the past. But we also know work establishes purpose and there is no government substitute for a job and an earned income.
By removing a work requirement, the government is putting itself in competition with small businesses. And as the last year has proven, small businesses operating on tight margins are no match for the government printing press or mandate machine.
Another damaging effect of $4.3 trillion of government spending is continued inflation. Americans with more money in their pockets is a good thing – but that is achieved through lower taxes, not ill-conceived labor policies and subsidies that render the dollar worthless. After already passing nearly $2 trillion in spending earlier this year, our economy is running at the highest rate of inflation in 13 years. That means higher prices for everyday goods for families and businesses. This isn’t just an indicator reserved for economists: “Sysco, one of the nation’s biggest food distributors, showed food inflation of 10.2 percent on its most recent quarterly report, increases that are passed along to restaurants and to the restaurants’ customers in turn,” the Washington Post reported.
The Wall Street Journal also noted that even wage gains for lower-wage workers are negated thanks to these higher consumer costs. Troy Sutton, a custodian at the University of Pennsylvania, stated in an interview: “I’m making more money. I should be able to see it…But I don’t see it because I’m paying more money for stuff now.”
A Democrat agenda that artificially boosts demand through government stimulus while curtailing supply through a self-inflicted labor crisis and higher energy costs will only make this situation worse.
Finally, the Democrats are planning the largest tax increase in history. The headliner is the increased corporate tax rate, which will affect all businesses and ultimately their employees. In 2017, Republicans in Congress and President Trump lowered the corporate rate to 21 percent from 35 percent, in part resulting in the greatest economy we’ve seen in a generation. Jobs and wages increased at historic levels for Americans across the socio-economic spectrum.
President Biden and the Democrats’ plan raises the corporate tax rate to 26.5 percent – even further away from a proposed “global minimum tax” of 19 percent that will drive more businesses overseas, further disincentivizing production and innovation in America. The Democrats will argue that big business can afford to pay more. But, aside from their hypocrisy that creates new carve-outs for rich university endowments like Harvard, their plan hurts the little guy. By removing deductions and increasing taxes by nearly 4 percent for business owners that operate as “pass throughs,” small businesses that have been struggling since March 2020 – and the new ones created since the pandemic under assumed tax burdens – are at risk.
As a former small business owner myself, I know these conditions are not sustainable. Americans don’t deserve to bear the brunt of policies pushed by people in Washington who will never feel the effects of them, and who will receive a healthy paycheck each month no matter what.
The Democrats’ idea of an economic plan is to punish citizens who are producing for our country and working to support their families, while rewarding themselves and others for staying home.