Call Your Senator Today: New Tax on the Table for Small Businesses

by Elizabeth Denham

Elizabeth Denham: Jerry, you had some news. Let’s talk about some things that are going on in Washington that the franchise industry needs to be aware of.

Jerry Akers: I got something that I think will be very important to business owners. Number one is what the heck is going on in D.C. that impacts small businesses, and this is hot off the press.

The Senate is starting conversations about adding a 3.8% tax increase on all small businesses. Now, there are a couple of driving factors here. Number one, they’re trying to pay for the Build Back Better Program, which a lot of us have heard about and they’re scrambling, trying to find where to bring money.

Taxes are always one of the things they’re going to take a look at. Not usually for small businesses, but in this case it is. And the second thing is people in D.C. who have never owned or run a small business really don’t know what it means to run a small business. And their perception is that business owners with small businesses use it as a tax loophole to avoid paying taxes.

And they’re not paying taxes for Medicare and some of those kinds of things. They don’t really understand that through the payroll that we have, we’re paying that through the payroll we give ourselves. We’re paying all of those things and this tax is never going to be paid by the intended person. And is not going to be paid by the small business owner.

Yes, I might write the check, but I’m going to either increase my costs to my customers to make up for it. And by the way, when a small business increases its prices,they don’t increase it 3.8%. They increase it 38% or 48% because they’re going to get a little bit of profit on anything that they put in their cost. And number two, if they don’t do it that way or some combination, it’s going to impact their employees because if you’re in a position as a small business owner where you can’t increase your price on your products and services and you get hit with another tax, you’re not going to take it out of your pocket. I will just tell you; you’re not going to take it out of your pocket. So, in many cases, that comes out of bonuses for employees, benefits for employees or even pay decreases for employees. So, I would ask our listeners that if you’re a small business owner, thinking about becoming a small business owner, get a hold of your senator.

Tell them that they must avoid voting for this 3.8% increase because it will not impact the people that they’re trying to impact.

ED: So, your advice to the small business owners that will be affected by this is to get in touch with their senators and congresspeople.

JA: Absolutely. Let them know that you’ve heard that the Senate is considering this. And explain what you would do as someone or how that would impact you, your customers and your employees so that they really know they understand that it’s not just an easy thing, that they put a tax on small businesses and a small business owner sends them a check that it’s going to filter down to people that they don’t have even considering. I’m guessing the International Franchise Association will be sending out something shortly. So, you heard it here first!

ED: If you need quick access to find your senator or congressperson, you can go to Senate. gov or House.gov to reach both houses and find the quickest way to get an email off to support small businesses.