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LOCAL BUSINESS TAXES, REGULATIONS, AND REDUCED WORKFORCE
The SPEAKER pro tempore. Under the Speaker's announced policy of January 4, 2021, the gentleman from Missouri (Mr. Luetkemeyer) is recognized for 60 minutes as the designee of the minority leader.
General Leave
Mr. LUETKEMEYER. Madam Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks and include any extraneous material on the subject of this Special Order.
The SPEAKER pro tempore. Is there objection to the request of the gentleman from Missouri?
There was no objection.
Mr. LUETKEMEYER. Madam Speaker, I come to the floor this evening with a number of my Republican colleagues to speak about the small business economy.
Small business owners have been devastated by the COVID-19 pandemic as they are still reeling from the Democrat-induced State and local shutdowns and economic downturn. At a time when Main Street USA has been focused on recovering from the health and economic effects of the pandemic, they are facing multiple challenges created by the Biden administration and congressional Democrats.
Given our country's unprecedented labor shortage, skyrocketing inflation, and supply chain crisis, small businesses, entrepreneurs, and startups alike are forced to bear the brunt of the Democrats' failed economic policies. In the midst of this economic storm, small businesses should be given the tools to recover, but now they are also being threatened with major tax increases and more burdensome regulations.
Since President Biden took office, we have seen multiple Democratic proposals that include increasing taxes on small businesses. Make no mistake: Tax hikes, no matter their form and fashion, will negatively impact Main Street USA.
A survey by the Small Business and Entrepreneurship Council found a majority of small business owners believe new taxes will significantly hurt their ability to recover from the pandemic. Simply put, this is unacceptable.
While the Democrats' socialist scam reconciliation bill continues to change week after week, many of these proposals would slash the 20 percent small business deduction enacted by President Trump's Tax Cuts and Jobs Act of 2017. According to IRS data, millions of small business owners claimed the 20 percent deduction on qualified business income during the 2020 tax filing season. This provision created more than $66 billion in savings for small business owners in 2019. The Democrats want to do away with this.
Other reckless proposals will have nearly doubled the long-term capital gains rate from 23.8 percent to the top ordinary capital gains rate of 39.6 percent. According to U.S. Census Bureau data, two-thirds of small business owners plan to sell their business, and eliminating the current long-term rate would have enormous implications for any sale of a small business.
Knowing this information, I must ask: Why would the Democrats propose such drastic tax rate increases knowing they will crush American businesses?
As the days evolve, we will see what the Democrats will concoct next to pay for their outrageous spending, but Republicans refuse to stand by and allow them to pay for it at the expense of small business prosperity. We will continue to monitor very closely.
At a time when small businesses are trying to get back on their feet, they are also absorbing the impact of other damage. As ``Help Wanted'' signs become a common sight on the doors of small businesses across the country and store shelves become increasingly bare, it remains clear that the Biden administration's labor crisis is a key contributing factor to the rising costs of goods and empty shelves.
For months, the Biden administration has paid Americans to stay home through extended Federal benefits instead of incentivizing these individuals to return to work. Our country's labor shortages have hindered the ability to get cargo to shore, unpack these much-needed goods, and find truck drivers to transport the products throughout the Nation. U.S. employers across all industries are struggling to fill more than 10.4 million job openings to meet the rising consumer demand.
Madam Speaker, in October, NFIB reported that 51 percent of small business owners have unfilled job openings, a 48-year high for the third consecutive month. Sadly, the historical average is only 22 percent.
As small business owners are bearing the burden of these extreme challenges due to the Democrats' failed economic policies, they are also facing regulatory uncertainty. During the previous administration, we cut burdensome red tape for small firms. However, we are already seeing an increasing regulatory trend with the Biden administration, which will hinder small businesses while they are already down.
We know that regulatory burdens deflate small businesses, yet this administration continues to plow forward with new restrictions and mandates. From the latest climate rules to the overreaching vaccine mandate, small business owners should be given the opportunity to recover from the pandemic and service their customers, not deal with even more bureaucratic red tape from the Democrats.
Beyond these economic headwinds, American taxpayer dollars have been wasted and abused by Federal Government agencies throughout the pandemic. According to the Small Business Administration's inspector general, $78 billion in Economic Injury Disaster Loans have been fraudulent.
This program is a direct loan and grant program, as small businesses apply directly with the SBA for funding. Instead of developing serious oversight controls, congressional Democrats want to expand the Federal Government's ability to make additional direct loans through the SBA. This is dangerous and puts taxpayer dollars at extreme risk. These proposals are irresponsibly opening the door for enhanced fraud.
My Republican colleagues and I will continue to fight for lower taxes and deregulation on behalf of small businesses across the Nation while also safeguarding taxpayer dollars every step of the way. We must legislate responsibly, and we will. Americans must get back to work, and that can only happen when Democrats cease their war on Main Street.
Congressional Republicans refuse to stand by and allow the Democrats to force through this socialist scam reconciliation bill at the expense of small business prosperity.
I appreciate that a number of my Republican colleagues are here today to add to this conversation.
Madam Speaker, I yield to the gentleman from Texas (Mr. Williams), who is the vice ranking member of the Small Business Committee.
Mr. WILLIAMS of Texas. Madam Speaker, I thank the gentleman from Missouri for yielding to me.
Madam Speaker, I rise today as a small business owner for 51 years. I still have a business; I still employ hundreds of people; and I want to be a voice for my constituents in Texas-25 and to call attention to the dangerous socialist policies--yes, I said socialist--that Democrats are, once again, trying to jam through the people's House.
President Biden inherited a strong economy from President Trump--
frankly, as good as I have ever seen in 50 years of being in business. But in less than a year, President Biden and Democrats want to crush small businesses with higher taxes and increased regulations, extend supply chain shortages, and keep workers on the bleacher seats with continued government handouts.
The government should not be paying people to sit on the couch or imposing tax hikes and regulations that will damage small businesses that are already struggling with record job openings because of government giveaways.
As a small business owner, as I said, for over 50 years, I understand firsthand the negative impacts of increased taxes and how excessive regulations can hinder growth and kill startup opportunities.
I have seen firsthand how the supply chain crisis is halting U.S. production. I see it in my business today, in the auto business, which the Biden administration refuses to acknowledge or let alone address.
Small businesses are hurting. Main Street America is still struggling to recover, and it is hurting. Banks are trying to provide increased access to capital, but they are being forced to hire more compliance officers than loan officers.
Burdensome, overreaching government policies have real impacts on small business owners and the communities who depend on them. We do not need the Federal Government to tell entrepreneurs--people who take risks--how to operate their businesses. Rather, it should foster a properly regulated economy that creates opportunity for all.
Main Street America is the backbone to our economy, and small businesses employ more Americans than any other sector there is. Hundreds of small businesses in my district in Texas and across the country will experience the negative effects of President Biden's and Speaker Pelosi's socialist policies--yes, I said socialist policies--as they chart a course to destroy Main Street, increase taxes, and make the people more reliant on the government.
Madam Speaker, I will continue to oppose any efforts to raise taxes or efforts to make it harder for businesses to compete. I encourage Democrats to end their relentless campaign to make America more like China and Russia. It just doesn't work. But competing with less government regulation does. The bottom line is: Risk and reward equal the American Dream.
In God We Trust.
Mr. LUETKEMEYER. Madam Speaker, I thank the gentleman from Texas for his insights. Being a businessman himself, he understands full well the problems that they have, the concerns about the bill being proposed, and the impact of all the decisions that this administration has made so far.
The key to economic success is economic freedom. That is a keyword, and you are going to hear a theme of that this evening, Madam Speaker.
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Next, I would like to introduce the gentleman from Kentucky (Mr. Barr), the ranking member of the Financial Services Subcommittee on National Security, International Development and Monetary Policy. I look forward to his commentary and his insights. He is instrumental in a lot of the different things we do there, as well the former chairman of the Oversight Committee, if I am not mistaken.
Madam Speaker, I yield to the gentleman from Kentucky (Mr. Barr).
Mr. BARR. Madam Speaker, I thank my good friend from Missouri, a real leader on the Financial Services Committee, and also our ranking Republican and leader on the Small Business Committee and tireless champion for America's small businesses. That is where all of the jobs are created in this country.
For the life of me, Madam Speaker, on the heels of horrible third-
quarter GDP numbers, I don't know why the Biden administration wants to put new taxes on small businesses. The GDP numbers for the third quarter were far short of what economists predicted and, yet President Biden's plan to so-called Build Back Better is actually a $400 billion tax hike on job-creating small businesses.
The bulk of this comes from an expansion of the 3.8 percent net investment income tax that is now going to hit active income for these pass-through businessowners. Democrats want to expand this to investment income of individuals actively involved in LLCs, S corporations, and partnerships, those small mom-and-pop Main Street businesses that really create jobs in our country.
Additionally, the Democrats are also pushing an $800 billion tax hike on American businesses that will be a gift to China, Russia, Japan, and Europe, making it better to be a foreign company than an American one. These crippling tax hikes will kill American jobs, drive economic activity overseas, and destroy small businesses as they struggle to recover from the pandemic.
As if this wasn't bad enough, Democrats want to arm the Internal Revenue Service with $80 billion in additional funds to target American small businesses and families. So not only will small businesses in Kentucky have their taxes go up, but they should prepare for an avalanche of new audits coming their way courtesy of this Big Government socialist bill.
On top of that, this legislation will only add fuel to the fire of the burning inflation crisis. This year the Consumer Price Index is up 5.4 percent, the highest in 13 years, but the Personal Consumption Expenditure Index, less food and energy costs, is up 3.6 percent, well above the Fed's 2 percent target and the highest in over 30 years.
Madam Speaker, the longer this inflation surge drags on, the risk of inflation becoming embedded in our economy grows more and more. This multitrillion-dollar Big Government socialist tax-borrow-and-spend bill will bury American entrepreneurs in taxes and debt. But one interest group that will be happy with this Big Government socialist bill, if it passes, are the unions that fund the Democratic Party.
Tucked inside of this bill is a proposal to provide a $4,500 additional incentive exclusively for union-built electric vehicles. This provision runs counter to the Democrats' purported goal of reducing carbon emissions and getting more electric vehicles on the road. That is because nearly half of all U.S. automotive production comes from automakers with workforces who have chosen to not unionize. In fact, of the 60 automakers in the United States who build electric vehicles, only 2 are unionized. So Democrats are effectively pitting American autoworkers at union plants against the autoworkers who work in my congressional district at the Toyota manufacturing plant in Georgetown, Kentucky, the largest Toyota manufacturing plant in the world. But small businesses are impacted because small businesses that are not unionized are part of the supply chain.
So let me be clear: There is no environmental benefit or additional carbon reduction achieved by favoring union-made vehicles over nonunion-made vehicles. While Democrats lecture about the need to provide alternatives to the combustion engine, to gas-powered vehicles, the irony here is that this bill greatly restricts the ability for tax credits to actually reach consumers. This is because Democrats are limiting the tax credit to union-built, U.S.-assembled vehicles and applying these proposed limitations to the current EV market. Estimates indicate that only 2 of over 50 electric vehicles would qualify for the full tax credit.
This is not building back better. This is a payoff to political supporters. Nearly half of all U.S. automotive production comes from automakers with workforces that have chosen to not unionize. Why are we punishing these manufacturers of electric vehicles? Because it is not about the environment. It is not about promoting electric vehicles. It is about a political payoff to union supporters of these campaigns. This provision is nothing more than that; a payoff to the union bosses who control Democrat politicians in Congress and the Democrat in the White House.
We should be for small businesses. And if we are for the environment, we shouldn't discriminate against nonunion automakers and the small businesses that support nonunion manufacturers like Toyota in Kentucky's Sixth Congressional District.
I thank my friend from Missouri for his leadership in opposing this massive tax increase on small businesses and for helping me highlight the hypocrisy of the supporters of this bill.
Mr. LUETKEMEYER. Madam Speaker, I thank the gentleman from Kentucky. As you can see and hear from him, his very insightful explanation of the bill and its provisions, its effects on small businesses and consumers, he gave a very, very thoughtful explanation of it, and we appreciate his insights and concerns.
There are lots of problems with the bill, and I appreciate Mr. Barr's comments.
Next, we have the gentleman from Louisiana, (Mr. Johnson). Mike is going to be with us here. He is vice-chairman of the Republican Conference. He is going to continue to explain some of the problems and pitfalls with this tax proposal that is an unwieldy and, frankly, harmful bill to our people, our consumers, and especially the small businesses in this country.
Madam Speaker, I yield to the gentleman from Louisiana (Mr. Johnson).
Mr. JOHNSON of Louisiana. Madam Speaker, I thank my friend, Ranking Member Luetkemeyer, and all of our Republican colleagues on the Small Business Committee for leading this very important discussion this evening. And this is very important.
Madam Speaker, the Democrats' radical multitrillion-dollar agenda is bad for America. It just is, and we can all see it. The voters can see that, too. In fact, while we are here right now, there are still voters lining up just down the road in Virginia. They cannot wait to vote for their next Governor. It is a race that is currently classified as a toss-up but it appears to be going very, very well for the Republican candidate.
The reason this is so noteworthy, the reason everybody in the country is watching this, the reason that everyone is so excited that it is a toss-up election is because this is in a State that President Biden won by 10 points just several months ago. And there are simply no conclusions to draw other than that the Democrats are leading our country down the wrong path. That is what the polling says and even the mainstream media outlets have had to report on that in the last few days.
It is the content of this tax-and-spend agenda, and not just the cost, that is especially dangerous for American families and our economy overall. You just have to think about the harmful effects the Democrat bill is going to have on our local businesses, many of whom, by the way, we all know are already operating on shorter hours due to the current labor shortage. But specifically, the legislation that is being debated and pushed through even this week is that the Democrats want to increase OSHA penalties, increase penalties on small businesses. That is a tax. They want to reduce the pass-through deduction. That is a tax. They want to increase the regulatory burden on small business owners at the worst possible time. You know what this amounts to? A tax. They want to make the child tax credit pay the same whether you are working or not, which what will that do? Logically, it will exacerbate the current labor shortage.
So let me repeat. The Democrat bill, in spite of what they are saying, will definitely increase taxes while prices are soaring. It will increase workplace penalties while companies are trying their best to get back to work, and it will encourage people not to work while the job market struggles, and our supply chain is slowed down due to a lack of workers in these critical positions.
There are nearly 32 million small businesses in the United States. About 350,000 of those are in my home State of Louisiana. They are our main employer. They employ more Louisianians than any big company or the government. This is the mainstay. This is the lifeblood of our economy. You are talking about deli managers and barbershop owners, and bookstore owners. You name it.
Small businesses across the country had to fight tooth and nail to survive the COVID-19 pandemic. The last thing this Congress needs to do is make it more difficult for these businesses.
But that is exactly what our Democrat colleagues are trying to do. As for the rest of the bill, well, they are still working on it, they tell us. We heard today there may be some deal on prescription drugs. Who knows? We have to see how that goes. There have been lots of promises broken--made and broken--here the last few weeks.
Meanwhile, the Democrats are still trying to include amnesty in this spending bill. What that has to do with the reconciliation, we have no idea. Hopefully, the Parliamentarian on the Senate side will put another kibosh on this. But they want to include tax breaks for wealthy New Yorkers and just a bunch of terrible ideas.
I have to digress for just a moment and talk about this amnesty problem, because not only will that be another burden on our small businesses; not only will it really take jobs away from law-abiding citizens, but you have to consider the insatiable appetite that our friends on the other side of the aisle have for amnesty.
We spent about 13 hours in the Judiciary Committee about 3 weeks ago working on their effort. The Democrats pushed that through to graft amnesty onto the spending bill. And after all of those hours, near the very end--late at night--we asked them if there was any end to this appetite they have for amnesty. We are talking about as many as 10 million illegals who have come across the border. And we brought a few amendments and we talked about this in our Conference, but we said, you know, gee, if you are going to grant amnesty and you all have the votes in the committee to move this through, we understand that, but we just want to see if there is any limit on who you might include in amnesty.
So we brought an amendment to the bill and said: What if someone is a known MS-13 gang member? Surely, you would want to exclude them from your amnesty plan. And I will tell you, every single Democrat on our committee voted that amendment down. Of course, every Republican voted
``yes.''
Then we said: Well, well, wait a minute. What if somebody is a convicted is sex offender, somebody coming from another country and they are a convicted sex offender? Surely, you would not want to include them in your amnesty plan. Every single Democrat voted ``no'' on that amendment. So I brought an amendment. I said: What if someone is a convicted criminal, and they are convicted of DUI, driving under the influence of alcohol and drugs, a terrible crime, as you all have said in your speeches in recent years? It kills thousands of Americans every year. It maims hundreds of thousands. Surely, if someone has been convicted of at least one DUI, you would not want to include them in your amnesty plan. Every Democrat voted it down.
So we tested it a little further. Okay, what if they have two or more DUI convictions? Every Democrat voted it down. So I went to 10 or more DUI convictions, would they be excluded from your magical amnesty plan? Every single Democrat voted ``no'' on that amendment. Every single one. There is no limit to what they want to do with this.
The one thing they do know, they want to spend trillions and trillions of our tax dollars before we know the score on all of this, before the actual text of the legislation has even been read. They are ready to roll. Democrats have a mere three-seat majority in this House. We have a 50-50 split in the Senate. They are acting as if they have some sort of big majority to radically transform the country, as they keep telling us. And what they have presented is the most partisan, most expensive legislation package in the history of this country, using the slimmest majority possible, and before they even tell the American people what is in it.
Make no mistake, a toss-up election in Virginia is just a taste of what is to come for congressional Democrats in 2022 if they do not immediately ditch this ridiculous spending plan and harmful government overreach.
I just say this: Today we have a battle that comes down to competing ideologies and agendas. It is now free-market capitalism versus Big Government socialism.
Mr. LUETKEMEYER. Madam Speaker, I would like to have a minor discussion with the gentleman here.
You made a couple of points here with regards to some of the discussions you had with regards to amnesty. Did one of the questions that you posed deal with the $450,000 payment that the President is proposing to all of the folks who come here illegally? Was that voted on or talked about at all in your discussion?
Mr. JOHNSON of Louisiana. Will the gentleman yield?
Mr. LUETKEMEYER. I yield to the gentleman from Louisiana.
Mr. JOHNSON of Louisiana. So I wish that that proposal had been on the table before we got out of that particular hearing because we certainly would have liked to have heard about that. But if you add that up, you are talking about perhaps $1 million per family, and $1 billion in cost overall, more costs to the American taxpayer.
And by the way, that little payment that the illegal migrants would be given by the American taxpayer is more than we give to Gold Star families, persons who have been lost in the line of duty, as you know. It is more than the victims of 9/11 that they have received for their pain and suffering. And, of course, those separations are permanent, not temporary. It is just not right.
Mr. LUETKEMEYER. So we could be giving a $450,000 payment to a MS-13 gang member; is what you are saying?
Mr. JOHNSON of Louisiana. That is what it means, and convicted sex offenders, and multiple DUI-convicted felons, and everybody else. They have included them all. There is no limit to it at all. Isn't that outrageous?
Mr. LUETKEMEYER. It doesn't seem to bother them that they are going to spend their own constituents' hard-earned tax dollars and give to a MS-13 gang member up to $450,000. Holy smokes. It blows you away.
Mr. JOHNSON of Louisiana. It is incredible. You can't make this stuff up.
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Mr. LUETKEMEYER. Madam Speaker, I thank the gentleman for his insightful discussion and presentation. I am glad he pointed out that the socialist agenda of this administration is being rejected by the people of this country. Probably very, very likely, today, we are seeing the first reaction to that at the polling places. I also appreciate his talking about the increase in taxes, the negative effect to small businesses, and the regulations as well.
It is concerning that the comment he made is quite true, because at this point, we have seen no text and it changes on a daily basis. Yet, we are going to be asked to vote for that thing, perhaps before we even get to see what is in it. Seems like I have heard that somewhere before.
Anyway, let's move on. We are excited to have the gentleman from Pennsylvania (Mr. Meuser) next to give us his thoughts on the monstrosity of a bill here and the tax and spending actions of the administration. Mr. Meuser is the ranking member of the Small Business Subcommittee on Economic Growth, Tax and Capital Access. I thank him for being here this evening.
Madam Speaker, I yield to the gentleman from Pennsylvania (Mr. Meuser).
Mr. MEUSER. Madam Speaker, I thank my good friend from Missouri, the Republican leader of the Small Business Committee, Mr. Luetkemeyer.
Madam Speaker, I am, as all of us are, I think, deeply concerned about the adverse impacts that the Democrats' budget reconciliation plan, as it is called, will have on our Nation's small businesses.
Today, small businesses are battling severe labor shortages, escalating energy costs, inflationary pressures, supply chain disruptions, and potential mandates that are causing uncertainty and threatening small businesses' viability. That is happening today.
All Members of Congress should be focused on pro-growth policies to help empower small businesses, startups, and American entrepreneurs. We should be discussing a smart deregulatory environment that allows the smallest firms to operate independently.
Instead, our Democrat colleagues are attempting to push through completely partisan legislation with trillions of dollars in reckless spending and over $420 billion, at least, in tax hikes on Main Street job creators.
Small businesses need better and they deserve better. Approximately two-thirds of American jobs are created by small businesses, so their strength is our Nation's economic strength. President Biden continues to tell business owners, and all of us, that this bill is going to reduce inflation and create jobs.
This reconciliation bill--by the way, that is reconciliation with a
``W'' because it will do the exact opposite. It will wreck our economy, unless somehow the President and the Democrats have figured out how to defy basic economic principles, which is pretty much like trying to defy gravity.
You cannot disincentive work and create more workers. You can't flood the economy with more dollars and drive down inflation. This just isn't how it works. It is against the simple laws of cause and effect.
Presently, we have a labor crisis that is at historic levels. How do new government programs that disincentivize work support millions of small business owners who are struggling to fill open jobs?
Has anyone ever met a single small business owner who believes raising their taxes will somehow help them build back better? The answer is a resounding no.
Most of us know this firsthand. I worked in small business for years. I hold regular business townhalls and talk with small businesses every day. We hold hearings where small businesses are saying the same thing.
Higher taxes, pending mandates, expanding the IRS--that will be a welcomed addition to their day--inflation, energy costs. I just got a text from a businessperson sending me a picture of over $4 a gallon gasoline and saying--well, I won't repeat what he said. Product shortages and labor shortages are smothering and perplexing American businesses. Small business owners are literally pulling their hair out. They are working harder and getting less for it.
Small businesses are not asking us to spend billions on a civilian climate corps or more IRS agents or amnesty, but they are demanding that Congress not raise their taxes, not issue confusing mandates, and that we won't make it more difficult for them not to just prosper but to survive.
It is time for the Democrats to halt this reckless tax-and-spend spree that does nothing but exacerbate the numerous crises facing Americans today. Reconciliation is a bad bill, it has been an even worse process, and it is truly an insult to small businesses who are counting on us.
Mr. LUETKEMEYER. Madam Speaker, I thank the gentleman from Pennsylvania for his insightful remarks, and I appreciate him quantifying that this is a $420 billion hit to small businesses.
His comment about working harder and making less, we understand the pandemic caused a lot of dislocation, but we should be past that now. We should be helping businesses get back on their feet, not kicking their feet out from underneath them and adding to the uncertainty with additional rules and regulations.
I am excited now to have one of the newest members of our conference, Congresswoman Young Kim from California, who is the ranking member of the Small Business Subcommittee on Innovation, Entrepreneurship, and Workforce Development. She herself has been a small businesswoman in the past, and I look forward to her insightful remarks.
Madam Speaker, I yield to the gentlewoman from California (Mrs. Kim).
Mrs. KIM of California. Madam Speaker, I thank Ranking Member Luetkemeyer for yielding and arranging this very timely Special Order to discuss how taxes, increasing prices, and the reduced workforce pool are impacting our Main Street USA, which is the true backbone of our economy.
I represent California's 39th Congressional District, which lays in the tri-county area of Los Angeles, Orange, and San Bernardino Counties. I have the pleasure to represent one of the most diverse districts in the country that has a very vigorous entrepreneurial spirit. Unfortunately, it has been trampled down by unclear guidelines on lockdowns, increased red tape, labor shortages, high inflation, and, now, a supply chain crisis.
Mr. Luetkemeyer knows very well that a big threat is looming in the horizon in the form of increased taxes and burdensome regulations through the partisan reconciliation process.
Instead of working with us to tackle the issues impacting small business owners and workers, this administration and this House majority are looking to add more fuel to the fire with fiscal expansionary measures at a time when economic analysts say that we could see inflation above 3 percent well into 2022. This is a run on inflation not seen since the early 1990s.
In my home State of California, parts of the State recorded their highest average gas prices ever last Friday. Some places are recording close to $6 per gallon. This is all taking place when some of our colleagues in the majority are calling for a total domestic ban on gas and oil production, which would undeniably increase prices for all goods and services.
To add insult to injury, California recently released its jobs report showing the highest unemployment rate in the Nation, and unemployment claims keep increasing.
So let's ask ourselves: Why is California seeing an uptick in unemployment claims when NFIB is reporting over half of small businesses have job openings they cannot fill? Why is California seeing a record number of job creators leaving to establish their businesses in other States? The answer is very simple. Many are tired of Sacramento punishing entrepreneurial ventures through some of the highest taxes in the country and burdensome regulations.
Let's learn from the mistakes enacted in California and instead work to empower entrepreneurs, job creators, and Main Street. Let's get back to the path of prosperity, where we are not punishing success, and we make it easier for individuals and families to establish small businesses and serve the communities that we all love.
I want to thank, again, Ranking Member Luetkemeyer for his leadership on our Small Business Committee and for being a fearless advocate for Main Street USA and entrepreneurs all across the country.
Mr. LUETKEMEYER. Madam Speaker, I thank the gentlewoman from California for her remarks, and we certainly appreciate her comments. She made a comment with regards to entrepreneurs. The small business folks are the entrepreneurs that make our country work. They are willing to take the risk and invest their own dollars, work long hours, and wind up being paid last, if at all sometimes.
I am glad she pointed out the lesson that we should be learning from California. A lot of times we look to California to see what the latest trends are. Right now, the latest trend is whoever is the last one out, turn the lights off. So I think we need to be looking at that and listening to those citizens, those businesspeople, who are leaving the State due to the high cost of taxes and regulations, just to be able to work there.
I am excited now to have another new member to our conference, who also is a member of the Small Business Committee, former State senator from the State of Wisconsin, Congressman Scott Fitzgerald.
Madam Speaker, I yield to the gentleman from Wisconsin (Mr. Fitzgerald).
Mr. FITZGERALD. Madam Speaker, the biggest tax increase for small business in over 50 years--let me say it again--the biggest tax increase for small business in over 50 years. This is what President Biden and my colleagues across the aisle are proposing in order to pay for part of their multi-trillion-dollar spending package.
The President and the Democrats have proposed a range of options that will hurt economic growth and fall on the backs of small businesses, like raising the corporate tax, raising the individual tax rates, taxing unrealized capital gains, and giving the IRS authority to spy on Americans' bank accounts.
In announcing the tax increases, the Biden administration said their agenda: ``Will protect 97 percent of small business owners from tax increases, while delivering tax cuts to more than 3.9 million entrepreneurs.''
But here is the problem. It doesn't add up. The statement doesn't add up. It doesn't hold up to the scrutiny. The reality is that approximately 1.4 million small businesses are structured as C corporations, meaning that they will be subjected to the proposed 28 percent corporate tax rate, as opposed to the current rate of 21 percent.
Let's talk about S corps. If you are not familiar with the S corp or the LLC, an individual small business owner's taxes flow through the S corp. So what is going to happen? They are going to increase the individual tax rate. What will that mean? S corps and LLCs will see an increase in the amount of taxes that they are paying.
Add in, as my other colleagues have already brought up this evening on Special Orders, rising inflation rates, increased cost of goods and services, shipping delays, labor shortages, and these small businesses will find themselves in a hole. They are trying to jump start themselves right now out of a pandemic, and we are going to tax them more? It makes absolutely no sense.
For nearly a decade, I was the owner of a small business. If you would have told me in 1990, when I started my small business, that I would be facing labor shortages, tax increases, and supply delays, guess what? I wouldn't have started a small business. You would be out of your mind to start a small business under those types of circumstances.
And guess what? We are seeing that happen in my home State of Wisconsin. The restaurant industry, gyms, manufacturers, construction companies, they are all struggling right now. If you are back in the district and you are talking to people and you are at a chamber meeting or you are at some type of specific association related to an industry, they will continue to tell you we are in trouble. Yet, the Biden administration and the Democrats are looking at tax increases on these small businesses.
We must give small businesses a chance to succeed. This trillion-
dollar reconciliation package and the subsequent tax increases do just the opposite.
If my colleagues on the other side of the aisle truly want to save small businesses, they will drop the spending plan, cut taxes for small businesses, replenish the Restaurant Revitalization Fund, and drop the arbitrary vaccine mandate. That is what would get employees back to work.
These small-business owners deserve an opportunity to chase the American Dream. As it stands, this reconciliation package will take that opportunity away from them.
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Mr. LUETKEMEYER. I thank the gentleman for his comments and insightful remarks. I really appreciate him pointing out something, that this is the biggest tax increase in 50 years on small businesses. Let me say that again, the biggest tax increase in 50 years on small businesses.
In our committee recently we had the Small Business Administration Director, and one of the members from our committee asked the Director if she had been advising the administration on the tax policy in this bill and had done any studies as to the effect of those taxes on small businesses? We couldn't get a response.
She said, well, it really wasn't something she would be concerned about. Here is the Director of the Small Business Administration, whose prime duty is to work this agency for the benefit of small businesses in this country, and she was not going to think that this bill was important enough with the taxes and other extraneous things in there to even think about working on it and advising the administration about what could happen to small businesses?
There is a huge disconnect within this administration about what is going on in the real world and the utopian view of how they would like to have things be in the future under a socialist regime. This is nuts.
How in the world can you put a bill together like this that has this kind of effect on small business and not even study the effect of it? Absolutely breathtaking.
I yield to the gentleman from New Jersey (Mr. Van Drew), a small business person himself. He has experienced some of these hardships and problems, and he is going to tell us all about what his views are on this bill and how it can impact his business.
Mr. VAN DREW. Madam Speaker, as we rapidly approach the upcoming holiday season, which is the busiest time of year for many American families and for many industries, I am, we all are, greatly concerned about the state of our country. Gas prices are the highest we have seen in nearly a decade, forcing families to contemplate if they can afford to travel for the holidays.
Worse yet, those wishing to travel further are worried that their flights may be canceled at the last minute because there aren't even enough pilots to fly the planes.
Those who have saved their hard-earned money for months to buy their loved ones something special for Christmas worry that their delivery will be stuck at our backed-up ports.
Make no mistake, all of these crises happening at once are not a coincidence. They are the result of failed Biden administration policies and a rejection, a whole-out rejection of the longstanding values that always made our America great. Authoritarian vaccine mandates on many vital industries have led to labor shortages on a massive scale.
Overtaxation on small businesses and their owners through an increase in the individual tax rate threaten more than 130,000 jobs in an already struggling job market. Overbearing red tape in this socialist reconciliation bill threatens to raise penalties on businesses by over 500 percent and will lead to more small businesses going bankrupt, something we have already seen far too much of over the last 2 years.
This is not what America wants. We are already struggling to sustain a valuable and available workforce. Democrats' overregulation on our businesses and government handouts are leading to a cradle-to-grave welfare state, crippling our country's ability to recover from the pandemic and once again thrive as the strongest nation on Earth. And it is all coming to a head. It is all coming to a head this holiday season.
We cannot continue to weaken American businesses. We cannot continue to weaken American supply chains. We cannot continue to weaken the American Dream. We cannot continue to weaken the greatest nation on the face of the Earth: America. We are the greatest country there has ever been and ever will be. Why is the left trying so hard, so desperately to destroy that greatness?
We must get Americans back to work, and we must support policies that allow our businesses to flourish and not wither away. It is the basis of America.
I will continue to fight alongside my colleagues to ensure that these bad, destructive policies and their decades-long consequences are prevented. We will continue to fight for good policy that opens our country back up, that gets our people back to work, that makes us strong and puts America back to the forefront of the world stage.
Mr. LUETKEMEYER. I certainly thank the gentleman from New Jersey for his remarks and reminding us that inflation is a tax as well. I think we need to remember that when we go to the gas pump. Last January I was able to get it for $1.89. On Monday I filled up my tank and it was
$3.19. I got nothing more. I got the same amount of gas. The only difference is it was $1 and some higher. Inflation is a tax.
I appreciate him reminding us of the work ethic and values that our small business folks display and have to work with every day to make their business work and the effects of mandates. I appreciate his comments.
Madam Speaker, I yield to the gentleman from Pennsylvania (Mr. Keller), who has a great personal story himself. I look forward to his remarks and his concerns about this monstrosity of a bill, socialist reconciliation bill.
Mr. KELLER. Madam Speaker, I thank Ranking Member Luetkemeyer for having this Special Order. At a time when we should be doing everything we can to help small businesses thrive and strengthen America's workforce, President Biden's radical socialist agenda is driving a wedge between job creators and the workforce.
Drawing upon 25 years of experience in private industry, working in a factory, later managing that factory, I understand the challenges that our businesses face and what it means to get up every day, go to work, and support a family.
President Biden and House Democrats aren't looking out for American families. If they were, they would not be working to increase the tax rates for small business owners or dumping more than a trillion dollars into the economy. That will only worsen the inflation we have seen and the supply chain crisis.
This build back better scheme is a farce. It is simply out of control. Whoever controls more of an individual's money and how they earn it controls more of their actions. That should be the person who earns it, not the government.
When you look at these tax policies, when you look at inflation, when you look at the fact that this administration has taken us away from energy independence, people are spending more for groceries, they are spending more for fuel, they are going to spend more to heat their homes, and that is controlling more of their money because of these poor policies. The best thing government can do is get out of the way and return economic independence to the American people.
I thank the ranking member for having this Special Order and allowing us to point out that we believe in the American people. They built the greatest economy the world has ever seen. They built the greatest nation on the face of the Earth, and I just wish that President Biden, when he talks about being frustrated with American citizens, would get half as frustrated with China and Russia and the Taliban.
Mr. LUETKEMEYER. I thank the gentleman for his insightful remarks. I really appreciate his comments. Pouring more money into the economy just adds to inflation. If we go back and look at the comments by the CBO when they scored the bill back in February, a $1.9 trillion bill, they said we didn't need it, that we would have 5 percent growth by the end of this year if we did nothing. And yet we spent $1.9 trillion and look at what has happened. We have runaway inflation going on right now, and we want more money to be spent again. This is nuts.
Government control. I appreciate his comments with regard to that. This is about government control. It is about controlling the economy and controlling individuals and controlling businesses. Again, it is about the belief that the other side seems to believe in the goodness and greatness of government, and we believe in the goodness and greatness of our people. I certainly appreciate his comments with regard to that and reminding us of those salient facts.
Madam Speaker, how much time is remaining?
The SPEAKER pro tempore. The gentleman has 9 minutes.
Mr. LUETKEMEYER. Thank you very much. I shouldn't be too long. We have rolled this around quite a bit, and we have hit on the high points, but I do want to make a few closing remarks.
The American people deserve better than this. We are here to be able to help them, not to harm them. We are here to be able to lift them up and empower them instead of take power away. We are here to give them hope, not destroy hope. You do all these things on the positive side, I think, by empowering them and letting them be who they are rather than take that away from them and try from the government side to control what they are doing and who they want to be.
I have the opportunity with one of the positions that I hold here in Congress to meet with a lot of foreign finance ministers from around the world, and it is always interesting to talk to them because they are very jealous of what we have. We have something most countries in the world don't have, and that is economic freedom. The freedom to be able to go somewhere tomorrow; if you want to change jobs, go change jobs. If you want to start a new business tomorrow, go start a new business. If you want to start another one next week, start another new business next week. Most places in the world you can't do that, and that is a huge difference. That economic freedom, that entrepreneurial spirit that we have in this country makes us different from everybody else.
This monstrosity of a socialist reconciliation bill is a dagger in the heart to the entrepreneurs and the small business people in this country who have built this country. The big businesses, where did they start from? They started as a small business. They didn't start as a big, major business to begin with. They started in somebody's garage or in a university research lab somewhere or as an idea that somebody scratches on the back of a napkin in a restaurant somewhere. These people, the entrepreneurs who are willing to put their ideas on the table, their money, and their beliefs and risk everything to make this work.
This bill that we are talking about this evening is a dagger in the heart to those people who are willing to take those kinds of risks and drive our country forward and provide the jobs.
As a reminder, when we unleashed the power of the people with the tax cut bill of 2017, we wound up before the pandemic of having 1.2 million more jobs in this country than we had people to fill them. The first time in history that we had those sorts of job openings for people to apply for.
The fundamentals are still there if we don't destroy them, and that is the key. This bill will destroy those fundamentals. Add to that the uncertainty that a lot of our good friends and small businesses that drive this country are concerned about, the taxes will be the burden that will have to be overcome, and probably will drive a lot of them out of business.
They are very concerned about the direction of this administration. They seem to believe, again, in the goodness and greatness of government. Our side believes in the goodness and greatness of our people, and we want to empower them and continue to protect them and work with them.
Madam Speaker, thank you for the opportunity to be here this evening and for allowing us to have this Special Order. I yield back the balance of my time.
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SOURCE: Congressional Record Vol. 167, No. 192
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