See this new fact sheet for the effects on Iowa small business owners and their communities.
DES MOINES, IOWA – On Thursday this week, the U.S. Senate is expected to vote on a Budget Resolution that will set the stage for Republicans to later propose $1.5 trillion in tax cuts. Iowa’s small business owners are concerned by what they’re seeing in Washington.
Though the budget and tax plans have been painted as benefitting small businesses, the cuts will actually overwhelmingly benefit the wealthy and corporations. Not only will the tax cuts starve their communities of investment, but very few true Iowa small businesses will see any change in their tax rate.
ReShonda Young, founder and president of Waterloo based Popcorn Heaven and Main Street Alliance Executive Member said, “The vast majority of Iowans will get very little from these tax cuts, because they are heavily slanted toward the rich and corporations. But nearly all Iowa families and small businesses (such as mine) will suffer from the resulting loss of public revenue: fewer potholes patched, fewer teachers hired, loss of health care, less retirement security. Federal tax rates played no role in my decision to expand my gourmet popcorn business over the past three years from a single store I ran in Waterloo to five franchises. What mattered was consumer demand — and my desire to give my franchisees the chance to live the American dream by owning their own business.”
“All we’ll get out is the loss of $770 billion in public revenue over a decade,” continued Young. “We need that money for public services like road repair and internet expansion that helps small business.”
The tax cut, financed by the ballooning of the deficit, will jeopardize funding for Social Security, Medicare, Medicaid, education, and other services that strengthens communities and allows small businesses to succeed. Despite Republican claims that these tax cuts would help small businesses, in reality the vast majority of small business owners and employees would not see any immediate benefit, and the drastic cuts in community investment decimate their customer base, hurting their bottom line in the long run. Indeed, the much-touted “pass through” provision, which would cut the top tax rate for sole proprietors, partnerships and other small businesses from 39.6% to 25% would not benefit 86% of small business owners. Instead, the beneficiaries are mostly hedge fund managers and law firms.
This threat is not abstract. The Senate budget proposes $5.8 trillion in cuts to federal spending, including nearly $500 billion from Medicare and $1.3 trillion from Medicaid and other healthcare programs. Another $650 billion may be cut from income security programs, such as Supplemental Nutrition Assistance Program (SNAP), Supplemental Security Income (SSI) for disabled individuals, and tax credits for working families.
“As a family farmer, I’m not fooled that Congress’ budget or tax plans will do anything to help me as a small business owner,” said Chris Petersen, farmer from Clear Lake and Main Street Alliance of Iowa Member. “Iowa’s small business owners need investment in vital community programs because these spur long-term, sustainable local prosperity. Instead, Republicans are proposing cutting trillions from essential services like Medicaid, Medicare, education, and food assistance, which are vital services for rural Iowans. We need investment in rural Iowa not tax cuts for the 1%.”
As a community of small business owners, employees and customers across the state, we urge Senators Ernst and Grassley should vote NO.
The deficit-boosting budget full of tax handouts to corporations and the wealthy will be voted on next week in the Senate. Senators Grassley and Ernst can and should help defeat it by voting no.
“The Republican budget resolution will be very harmful to Iowa’s small businesses if it becomes law. It fails to address the pressing needs of Iowa’s small businesses, instead of giving huge tax cuts to the wealthy and big corporations while slashing funding for services small business owners and their communities rely on, such as Medicaid, Medicare, and education. And, it will actually raise taxes on many of the middle-class families that are Main Street’s customer base. Senators Ernst and Grassley need to stand up for the needs of Iowa’s entrepreneurs, farmers, and other job-creating small business owners – not give more tax breaks to the wealthiest among us. They have a responsibility to stop this immoral scheme in its tracks.” – Sue Dinsdale, Director, Main Street Alliance of Iowa.