Dashboard: What’s in the Build Back Better Bill for Small Businesses?

[Music] welcome to another 21 hats dashboard most Mondays Jean Marks and I talk about the issues we think business owners should be monitoring this week but today I have a special guest John aens Meer who is founder and CEO of small business majority an organization that Advocates on behalf of entrepreneurs welcome John thank you Lauren thanks for having me my pleasure John I especially wanted to talk to you today because I was hoping we would have a final word on the administrations build back better bill but as we tape this late on Friday uh I gather that's not likely to happen imminently uh what do you know at this point we have a new definition here for the word frustration um so uh you know we we only really know uh I mean we've been in contact with people in the white house and on the hill um but we were told yesterday we'd have a bill and uh hasn't happened yet um so we're now being told um early this next week um and um you know I I can't tell you for sure if that's going to happen or not a lot of lot of false Starts Here we thought there were some reasons to think that there was a deadline they were going to take seriously that they had to get it done this week but now that's gone and who knows how long it could take but let's let's talk about it from this perspective uh John you're there in DC I know you've been following this closely what's at stake for business owners in you know the the whatever form this ultimately takes well Lauren there's a lot in this framework the latest framework on even in the original framework um that is good for small business um they um it it for the most part this bill the so-called reconciliation bill or human infrastructure Bill addresses um issues that um will enable small businesses to have kind of a sort of a social infrastructure that sits underneath them um and enables them to be Freer financially um to uh to start and run businesses so for example Healthcare um it does appear in this latest framework there's going to be an extension of the um ACA premium tax credits that makes healthare that much more affordable you know right now over half of the participants in the healthcare exchanges are small business owners employees or independent um entrepreneurs so that's good um there's going to be um money in their uh to allow people in states that did not expand Medicaid to um buy into the exchange and that actually covers a lot of small business employees who are caught in between the old Medicaid and and what the um ACA um uh uh networks cover so that's good um uh the child care there the childcare tax credit looks like that's going to be continued um that's very helpful for working parents particularly um um mothers who may be running businesses or may be working at small businesses businesses that don't offer Child Care um it also supports um the childcare industry which is by and large made up of very small businesses are run by women by people of color by immigrants so um they're struggling with u just running their businesses these days um there's expanded uh money for uh the Earned Income Tax Credit which again helps independent entrepreneurs who may not have that much income and it also supplements the income of of employees of small businesses so that's all good and it kind of falls under the category of um things in our economy I hate to use word safety net but it's basically kind of an a human infrastructure in our economy that enables people who are running and working for small businesses to um be Freer to pursue pursue their economic goals interesting um are there things that may be in the bill at this point that you're not as uh feeling as positive about things you're concerned about well there are two things that are not in the bill that we're concerned about I this is exactly what you asked let me just put this out there I'll be very quick please sure prescription drug pricing um it's outrageous 80% of the um American public supports uh action on prescription drugs particularly allowing um uh Medicare to to negotiate prices um you know small business owners and small businesses are continue to be hit with with high health care costs and you know yes it's the subsidies in the ACA exchanges are great but in fact we have too much cost in the overall system so that's too bad and the other major thing that's not in there that is concerning to us is support for paid leave um and this was an opportunity for the government to come in do what every other industrial democracy does and provide support for paid Le for um for employees um that small business owners can't afford to provide themselves and it levels the playing field between very small businesses and large businesses and for some reason that is not in there we understand that Senator Mansion did not want that in there I don't really understand the reasons why so those are two things in there that we don't that we're sorry are not in there there isn't really anything in here that is is a problem for small business I mean quite frankly it's you know it's the government stepping in as we come out of a pandemic um to provide support across the entire economy and a lot of that's going to benefit small business what one of the way ways that it raises revenue is with a corporate minimum tax if this stays in the bill if the bill stays the way we've been uh hearing about it of late uh does that have any impact on small businesses um our understanding of the way that's written is that it's um the the taxes on um on profits over a billion dollars the 15 % minimums that's really set up for large um public companies that are um basically Bally showing uh tax profits that are different from their book profits um which we understand is you know that that's what happens and I think what Congress is saying um is that um we need to at least have some level of tax coming from those companies that obviously doesn't affect small business there other Provisions in the in the framework as we understand it that are are on people making you know millions of dollars um they're not on on the average small business the um sir tax on um on the wealthiest Americans is for those who income over $10 million um yes there are a few technically small business owners making that but it's really not um and by the way it's an additional surch tax on income over 25 million but this by and large does not affect um the vast majority of business owners um in the country um there's a bunch of Provisions around International tax a 15% minimum tax on foreign profits again not likely to affect very many small businesses um a s um and then why is that John is it be because is there some um minimum level of Revenue or is it because you're saying that not that many small businesses do business internationally uh mostly the latter um but in fact um you know the the the whole vast number of countries agreed to this 15% um tax um you know Equalization across countryes what's happening now is that people are parking profits in countries with very low uh tax rates like Ireland um and it's not even really that the money is even there it's just it's it's a slight of hand it's a slight of accounting hand something by the way that most small businesses don't have um the um capability to to do and um you know this is essentially saying look if you're um if you're earning money abroad um you you can't hide it in a in a country that's got a very low tax rate and there's going to be a minimum tax on on foreign profits so uh again for the the vast majority of business owners that we deal with um and small business owners in this country that there's really um virtually no effect of that one piece I read about the uh the latest version of The Bill said something about there being a tax aimed at quote unquote wealthy business owners who have a pass through uh business structure it didn't explain what they meant by that do you know what they mean by quote unquote wealthy business owners that they want to Target I I think it's the it's the sech Hax uh there's there's nothing our understanding is there's nothing in here now that's specifically about pass through versus not pass through it's a sh tax on income over $10 million and a greater sh tax on income over $25 million um yes that could be income from In from from pass through absolutely but there's not a specific pass through provision per se and it was the the wording in the piece that I read and may you know maybe it was just just wrong and there's no reason you need to explain this if you don't know but it it it seemed odd that it was specifically saying business owners uh as opposed to just targeting a specific level of income do you know anything about that it may be I didn't read the article it may be that the the author of the article was trying to say look this is going to impact some some business owners that have passed through income which is which is undoubtedly true fair enough but it's you know the the the percentage of of business owners with pass through income over $10 million is you know a minuscule portion of 1% so um but yes in fact I'm sure some of that income will be pass through income from business owners yes one other thing that uh I saw referenced was a uh there is going to be additional funds to step up IRS enforcement is that something you think business owners should be concerned about uh well I think look it's a natural concern to be you know when you're you're hearing oh you know IRS is going to up enforcement um and I think that um you know I understand where people might you know be nervous um the intention is I understand it and that's quite friendly where the money is is in very large um corporations um or very very wealthy people um who you know the studies show U there's a certain amount of that that's not being um that's not being um paid and um you have I think it's on a annual basis you've got billions of dollars that are not being collected um so the you know if the IRS is going to seek to gather more money they're going to be looking at very large um corporations and um very wealthy individuals um and you know I would say that you know with small business owners um you know should be careful about um paying the taxes it's kind of hard to argue that you don't want um there to be enforcement of the tax laws um so yes we understand uh that you know obviously there may be some heightened concern but in fact um the intention and the and hopefully the result of this will be to collect additional tax from from very large corporations of very wealthy people not your typical small business owner all right well you you've already said that you know we're Beyond frustration here and nobody can really know where this goes but do you have a gut feeling about this do you think it's going to get passed I think it's going to get passed in some form and I can only assume it will be somewhat close to what was in the framework um it's hard to believe that they got that far out front uh and it's going to radically change but you know um so yes I think something will pass I think it'll be close to what we've seen but I I I obviously can't say for sure all right my special guest today John aens Meer is founder and CEO of small business majority a small business advocacy group you can learn more at small business majority.org thank you John always great speaking with you thank you Lauren great great to be on the show appreciate it uh have a great week everyone thanks for joining us