Small businesses and their customers will be badly hurt by Republicans’ bid to enact massive tax cuts for the wealthy, according to Sen. Ron Wyden and small business owners from across the country who joined him to denounce the plan.
“What the Republicans produced was a multi-trillion dollar handout for multinational corporations and tax cheats,” said Wyden, Ranking Member of the Senate Finance Committee, on a call to reporters hosted by the Main Street Alliance, a national coalition of small business owners. “It is going to raise taxes on hardworking Americans, and leave small businesses in the lurch.”
Joining Wyden to speak out against the GOP tax plan, which has been cleared for debate in the Senate and may reach a floor vote this week, were local business leaders from Maine, Oregon, Arizona and Iowa.
“Reducing the corporate tax rate further tilts the scale in favor of large corporations and puts Main Street businesses at an even greater disadvantage,” said ReShonda Young, the owner of Iowa-based Popcorn Heaven, which has five locations in four states.
Raising Taxes for Consumers
The GOP tax bid will have a chilling effect on the U.S. economy, according to Wyden and small business leaders. While it promises cuts, it actually raises taxes for 87 million low and middle-income Americans, and funnels these resources towards the nation’s wealthiest individuals and multinational corporations. This provides incentives for corporations to further offshore jobs and profits, rather than invest at home.
“Even though multinational corporations are awash in cash, powerful CEOs are making plans to use these tax handouts to fund stock buybacks, pay down debt, and pass on windfalls to wealthy shareholders,” said Wyden. “Multinationals have been given a green light to ship red, white and blue jobs overseas instead of creating jobs here at home.”
The plan automatically cuts $25 billion from Medicaid, and Wyden warns greater cuts to health care and other essential services will soon follow, to drive down the $1.4 trillion the tax plan adds to the deficit.
“The Republican deficit hawks who flew away from the multi-trillion dollar pricetag came to be very interested in flying back when (House Speaker Paul) Ryan indicated this would be the case when the next bill cuts Medicare and Medicaid,” Wyden said.
Buy Local, Hire Local
Small businesses, unlike multinationals, invest in their local communities and rely on the ability of local consumers to spend disposable income, according to the business leaders.
“Small businesses are rooted in our communities, and we create jobs right here at home,” said Emily Spetrino, owner of the Coronado Restaurant and Dark Hall Coffee in Phoenix, Arizona. “We’re not going to move offshore. The success of my business depends on strong consumer demand, not tax cuts for the top one percent.”
Spetrino also highlighted the role access to essential services plays in promoting entrepreneurship. Cuts will blunt innovation, she says.
“When I first became a business owner, my family and I had to utilize services like Medicare for critical health care needs,” said Spetrino. “If I hadn’t been able to access health care, I would have been unable to open my first restaurant and wouldn’t be able to contribute to my community through my now-successful business.”
Amy Grant, the owner of Good Karma Farm in Belfast, Maine, warns these cuts will destabilize the health care market and leave seniors and the disabled without care.
“If Republicans hope to pay for this massive tax cut for the wealthy, they’ll do it by cutting trillions more from health care and social security,” said Grant. “What small business owners like myself, our employees and our customers need is affordable, quality health care coverage, not more tax cuts for the super-rich.”
Pass-Throughs For The Wealthy, Not Small Business
A handful of GOP senators, including Ron Johnson of Wisconsin and Steve Daines of Montana, have successfully lobbied for the tax plan to lower rates paid by “pass-throughs,” or single-owner companies, arguing that this change will benefit small businesses and their owners.
However, according to the Main Street Alliance, this disproportionately benefits wealthy individuals, like Johnson and President Trump, the bulk of whose personal holdings are pass-throughs, and only minimally benefits most small businesses.
“Wealthy passive investors get the full benefit of the pass-through loophole, but active business owners won’t get this,” said Sapna Mehta, MSA’s Legislative Policy Director. “This tax bill will take away from small business owners and customers to give a permanent cut to the one percent.”
Whose Main Street?
Ironically, at the same time Wyden and small business leaders were laying out the GOP tax plan’s real and devastating consequences for the majority of employers in this country, President Trump was in St. Charles, Missouri, extolling the benefits of the tax cuts to Main Street in a falsehood-laden speech.
“Today, just as it’s always been, Main Street is the heart of our economy, the soul of our community, and the birthplace of American dreams,” Trump said.
That may be the one and only point of agreement between Trump and the men and women who create jobs at businesses all across America. Where they disagree is on a tax plan that benefits only a handful at the expense of the vast majority of working people and future generations.
“I have nothing against businesses making a profit, and I have nothing against the wealthy,” said ReShonda Young. “ My issue is with my elected representatives only representing themselves and their wealthy counterparts, instead of the vast majority of their constituents, who they are also elected to serve.”