Biden Pushes ‘Build Back Better’ Plan To Help Small Businesses

Although Wall Street has largely roared back from the economic shock of the COVID pandemic, many small businesses still struggle to grow and compete. The Biden Administration says that part of the reason is the current tax code that “disproportionately benefits multinational corporations and a financial system that prevents millions of entrepreneurs from obtaining sufficient capital to start and expand operations.”

Nearly three-quarters of small businesses say the current tax system favors big businesses over small businesses, while about two-thirds of small business support increasing taxes on corporations. According to a new Treasury Department analysis, the President’s Agenda will protect 97% of small business owners from income tax rate increases, while delivering tax cuts to more than 3.9 million entrepreneurs.

Biden advocates providing tax cuts to Main Street entrepreneurs, many of whom were hit disproportionately by the pandemic because they were less financially able to whether the drop in revenues caused by the COVID lockdowns. The proposals include:

· Cut taxes for small business owners with children. The American Rescue Plan (ARP) increased the Child Tax Credit from $2,000 per child to $3,000 per child for children over age six and $3,600 for children under age six. The administration is looking to extend the Child Tax Credit expansion in the ARP. New research from the Treasury Department shows that more than 3 million small business owners with children will benefit from these tax cuts.

· Cut taxes for small business owners who buy coverage through HealthCare.gov. Prior to the Affordable Care Act (ACA), small business owners and their employees comprised an outsized percentage of uninsured working Americans. Today, the owners and workers at small companies represent more than half of the people enrolled in ACA marketplaces. Earlier this year, the American Rescue Plan provided tax credits that lowered health insurance premiums for those buying coverage through the ACA, saving families an average of $50 per person per month. The Biden Administration says that by making these premium reductions permanent, 9 million people – including more than 1.2 million small business owners – will save hundreds of dollars annually on their premiums.

· Help small businesses recruit and retain workers through a federally-funded paid leave program. While the majority of small business owners believe it is important to establish a federal paid family and medical leave program, the U.S. remains one of the few countries in the world that does not provide it. Thus, nearly four out of five private sector workers and 95% of the lowest wage workers do not have access to paid leave. This puts small businesses at a disadvantage when it comes to recruiting and retaining talented workers since corporations can afford to offer their employees paid leave programs, while many small businesses cannot. Biden wants to guarantee 12 weeks of paid parental, family, and personal illness/safe leave by year 10 of the program and ensure workers get three days of bereavement leave per year, beginning starting in year one. The administration says that wage replacement would come from the federal government, not the employer, thereby eliminating any potential burden on small businesses.

Increasing access to capital, contracting, technical assistance for small firms.

President Biden has been a vocal advocate of expanding access to capital, particularly for businesses owned by women, minorities, and immigrants. The President seeks to increase access to federal contracts and invest in new financing and technical assistance programs that will directly benefit small businesses. The plan will:

· Launch an effort to empower small business creation and expansion in underserved communities. The Administration wants to create a national network of incubators and business development centers to help more entrepreneurs start up new businesses, gain access to government contracts, and expand their customer bases.

· Give underserved small businesses the tools to drive the innovation economy. President Biden is calling on Congress to invest in federal programs that empower small firms to participate in federal research and development (R&D) initiatives that have the potential for commercialization.

· Help minority-owned manufacturing businesses access capital. The Biden Administration wants to create a new grant program through the Minority Business Development Agency that will help small, underserved manufacturers secure capital.

· Increase access to lending and investment capital. The President is calling on Congress to seed a new program to co-invest with private capital in the industrial base. He also plans to drive the recovery by injecting billions of dollars in funding into the SBA’s 7(a) loan program.

· Strengthen manufacturing supply chains and innovation ecosystems. The Biden Administration is looking to create a new office to monitor industrial capacity and support the production of critical goods and establish regional hubs to fuel technology development and create new businesses.

Since taking office in January, President Biden has made helping small businesses – particularly minority-owned firms – a priority. Through his Build Back Better Agenda, he proposes actions designed to boost entrepreneurship and the competitiveness of America’s small businesses. Of course his many proposals still need to be debated and voted on by Congress before they can become law. So the public through their representatives will need to make their voices heard on these many small business initiatives.

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