Democrats’ “Mom & Pop Paycut” is a Small Business Surtax on America’s Small Business Owners

Democrats aren't "closing loopholes" but expanding a tax that will cripple our economy and harm Main Street business owners, while putting billionaires over bartenders.
After failing to reach consensus on a $5 trillion tax-and-spend spree, Democrats are now looking to pass a supposedly “slimmed-down” version of Build Back Better, funded by a tax on small businesses that is little more than a “Mom & Pop Paycut.” While Democrats claim they are merely “closing loopholes,” this is an expansion of a small business tax that will cripple our economy and harm Main Street business owners who employ nearly half of the American workforce…


…Democrats’ “Mom & Pop Paycut” is a penalty on running a small business

• Democrats’ newest tax increase (the so-called “Net Investment Income Tax” or “NIIT”) would hit only “sweat-equity” owners of small and family-owned businesses, commonly known as the “Mom & Pop” shops in our communities.
• Billionaire “passive” investors avoid higher tax bills, while the “active” owner-operator of a salon or electrical supply store pays more — putting billionaires over bartenders.
• In total, Democrats would add $252 billion in new taxes on America’s family-owned businesses that fought to stay open during COVID and now struggle to find workers and supplies in Biden’s broken economy.

Owner-operator small businesses are the cornerstone of our economy

• 75 percent of small businesses are organized as S corporations, partnerships, or sole proprietors—and all are in-scope of the new tax.
• The sector employs 52 million Americans, 42 percent of the workforce….
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  read more: https://gop-waysandmeans.house.gov/...ess-surtax-on-americas-small-business-owners/
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• democrats are out to protect the bicoastal elites and billionaire class that is their base yet again. They are targeting small mom and pop family businesses and your local shopkeepers and their employees with economy killing tax increases. The same that they determined non essential and closed down and now can’t find enough employees and supply.

 

Around 60% of small businesses employing close to half of America’s workforce would be negatively impacted by this if it were to become law. It’s as if blue politicians think that America’s small independent businesses weren’t hurt bad enough by covid lockdowns and various mandates so they are back to hit them again.

 

If mom and pop are dropping $250K a year taxable income, they can afford the 3% tax

 

First of all few family businesses generate that kind of income post business expenses, inventory, and wages/benefits are paid out. Most are still hurting from the covid lockdowns and post initial lockdown mandates and limits on business, keeping employees, and finding inventory on a timely and cost basis. Biden lied and said no one who made under 400k would see a tax increase.

 

Behold, the smell of jealousy.

 

WE need a constitutional amendment that forbids government from add new taxes without repealing equivalent ones.

 

Envy, covetousness, jealousy, greed are among the motivating factors along with power and control that are the motivations behind tax proposals like this

 

All part of the great reset and the socializing of America.. Government control of all business, housing, transportation, retail, China here we come

 

You got that all exactly right! Well said!

 

Nope. It is just common sense. If they are maxed out of having to contribute to social security then they can afford the 4ish percent. They are still walking away 2% better.

 

If "few" will see it, then why get upset about it?

 

Because like all government tax increases, far more than allegedly targeted end up getting stuck paying them. We need to leave small business alone when it comes to more taxes and regulations.

 

Sure, after they layoff some folks.

 

2% better than what? They are better off leaving well enough alone and leaving things as is now.

 

• Small businesses and entrepreneurs are the bane of totalitarian socialists, aka Democrats.

 

If anyone is interested in what is actually happing and not the right wing lies and propaganda

https://www.stinson.com/newsroom-pu...e-tax-increase-on-sales-of-private-businesses

Under the act, the expanded NIIT would apply to all income earned by an individual, unless such income is either taxable wages or subject to the self-employment tax. (Note: The expanded NIIT would apply to individuals filing a joint return and having adjusted gross income over $500,000, or single individuals having adjusted gross income over $400,000.) None of the items listed in the preceding paragraph is subject to the self-employment tax, so under the act, these items would now be subject to the tax increase.

In sum, the expanded NIIT would impose a new 3.8% tax on (1) most income allocated to an S corporation shareholder and (2) gain from the sale of the interests in, or the assets of, any private business taxed as an S corporation or a partnership (all effective January 1, 2022) provided the owners exceed the adjusted gross income thresholds in the prior paragraph.
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Is 3.8% added to the current 3%, or is 0.8% added to the 3%? ​

 

From reading at a few places it seems to be the new rate is 3.8% so it would be 0.8% on top of the current — it would mostly just be expanding the tax.

 

It will harm small businesses and family farms and thus their employees and their customers who will help pay for it. Also there’s the legal issue of it being a retroactive tax. It’s pure stupidity to even think of this or advocate for it when we are in a recession.

 

If a small business is making 500k in self employment income (this is gross profits not net receipts) they have no reason to have such a deduction. All deductions need to be removed above a certain income threshold. Our company has made above that mark twice since we have been open and I would have have been happy to pay an additional tax — if we do so again I will be happy to pay it then.

Someone has to pay down this debt that has been accrued from wasteful spending over the current and prior administrations and it isn’t going to be the people living paycheck to paycheck.

 

We pay down the debt by cutting tax rates and regulations to spur growth so that the rates bring in more revenues than the higher rates before them did. Kennedy, Reagan, Bush 43, and Trump all grew federal tax revenues long term after tax cuts. The key to reducing deficits and paying down debts is to regulate federal spending to below inflation and population growth numbers and do actual real spending cuts in some places.

 

That isn’t true in many cases however, the 2017 ones failed to do this and may have even amplified the situation Americans currently find themselves in:
https://www.brookings.edu/policy202...cut-the-tax-cuts-and-jobs-act-pay-for-itself/

 

Common sense? More like common theft, and justified by people like you who wish you were in their shoes, so dragging them down makes you feel better about yourself.

Guess what? I'm not in their shoes either, and with my (relatively) new disability, may never be, but I don't form my opinions on policy decisions on how they would affect me. I also object to estate taxes, but since both my parents are deceased without hitting the threshold, and I'm unlikely to hit it myself (and don't have any kids to leave anything to, anyway), my objection to that is not for personal reasons, either.

 

"Mom and Pop" won't pay more they will just pass it on the the customer.

 

This makes little sense. It says that because the government doesn't charge this or that other taxes they should be happy to pay NIIT. That's like telling a felon who has just been sentenced to 2 years for robbery that he should be happy because he was not sentenced to 10 year for a crime he didn't commit.