Dawn is finally breaking for small businesses as the COVID crisis is steadily being brought under control. Across the country, bars, restaurants, and mom-and-pop shops are reopening, small businesses are hiring, and people are going back to work.
We are at the cusp of a real recovery. Unfortunately, some at the top levels of government seem determined to cut the small business economy off at the knees before it has a chance to get back on its feet, by disincentivizing workers and imposing burdensome taxes and regulations on job creators and small business owners.
For starters, the recent federal stimulus has suppressed hiring, as some workers find that government benefits pay more than returning to work. This short-term benefit has served as a disincentive for workers to return to the workplace, hurting small business owners trying to restart their operations — thereby forcing 23 states to end supplemental unemployment benefits this summer.
Politicians on both sides of the aisle can and should work together for the benefit of the American people and American small businesses. Sometimes the Republicans have good ideas, sometimes the Democrats have good ideas. But the Biden administration’s “Build Back Better” agenda, if implemented, may mean that American small businesses can’t build back at all.
Recently, a coalition of 28 industry groups joined forces to create “America's Job Creators for a Strong Recovery” in order to combat this tax-and-spend agenda. It’s easy to see why.
The “Build Back Better” agenda, which includes both the $2.3 trillion American Jobs Plan and the $1.8 trillion American Families plan, is to be paid for by a number of new taxes that would cripple an already struggling American economy, including raising the corporate tax rate to 28 percent, imposing a global minimum of 15 percent tax on companies' overseas profits, hiking the top individual income tax rate to 39.6%, and nearly doubling the capital gains tax rate. To ensure these new taxes are actually collected, the plan also proposes boosting IRS funding by $80 billion over the next decade.
But instead of concentrating on taking money from the backbone of America — small businesses — the government should concentrate on helping people make it. Very high net worth individuals are a natural target, but they are not the only targets of the planned tax hikes.
Contrary to what many people seem to believe — or seem to want you to believe — the top one percent of American earners constitutes anyone who makes over about $538,000 a year. The top 10 percent of American earners constitutes anyone who makes over $145,000 a year.
Many small business owners fall into those income brackets, so increasing their tax burden at a time when many of them need to reinvest every spare cent in their businesses and employees is simply wrong.
I’m an entrepreneur who started with a small business that became a big business, starting from a broom closet in my daddy’s bar. Papa John’s was able to embrace the American Dream and that’s what makes America great. But if the current economic proposals being floated in Washington are put into practice, the American Dream will become a forgotten memory.
There is a twisted, bitter irony to contemporary views on economic policy from the far left. It’s common to hear attacks on the power and wealth of giant corporations, and these criticisms can be justified. But massively increasing corporate taxes doesn’t really hurt massively large corporations — it only ensures that small businesses in the same industry can never grow to be competitors to those corporations.
Giant corporations will happily pay a little more in taxes to ensure they never have to worry about competition — and that’s the deal the power brokers in Washington are currently offering them. In the name of helping the little guy, these tax policies may in reality only shore up the power of the big guy. And I don’t think any American of any political persuasion wants to see that happen.
After a very dark period, the sun is finally starting to rise above the horizon for small businesses that have struggled so greatly through this pandemic – and survived. Now we need to ensure government gets out of the way to help them thrive once again, which includes eliminating policies that disincentivize workers from returning to work, burden businesses with overregulation, and increase taxes to levels that will crush the hopes of every small business owner in America.
Papa John Schnatter is the founder and former Chairman and CEO of Papa John’s International Inc.
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