Small businesses snatch Manchin, Schumer deal: ‘Misery for many more Americans’

Small business interest groups criticized a deal announced Wednesday by Senator Joe Manchin, DW.Va., saying it would increase inflation and hurt employment.

The groups said the deal, titled Inflation Reduction Act, will increase pressure on small businesses that have already struggled to stay afloat amid record prices and slowing economic growth.

The legislation was unveiled after weeks of negotiations between Manchin and Senate Majority Leader Chuck Schumer, DNY, who said it would ensure businesses and the wealthy “pay their fair share.”

“We all know that taxes are coming down,” Alfredo Ortiz, president of the Job Creators Network, said in an interview with FOX Business. “So, either it’s going to be higher costs and ultimately consumer prices, which is inflationary, or it’s going to be a job killer. In the end, you have some levers to pull.”

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“Taxes are considered a cost input,” Ortiz added. “If costs rise, taxes rise, prices rise, which, again, is inflationary and will impact the average small business owner, the average American consumer.”

The Inflation Reduction Act, passed by President Biden, will cost about $ 433 billion, most of which will be invested in climate measures, while increasing tax revenues by $ 739 billion. The bill ensures that large corporations pay at least 15% in taxes, which alone would increase tax revenue by $ 313 billion and increase IRS enforcement, increasing tax revenue by another $ 124 billion.

The legislation also closes the carried interest loophole that allows private equity executives to pay lower taxes on certain incomes. Such a provision would increase revenue by $ 14 billion.

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“The Schumer-Manchin tax hike deal is being sold as a tax hike that will only impact big corporations and the rich. Don’t be fooled,” said the chairman of the Small Business and Entrepreneurship Council. Karen Kerrigan in an email to FOX Business. “The effects of these tax increases will be felt and absorbed by ordinary Americans and small businesses in our nation.

“The increase in taxes on transported interest means that many entrepreneurial and small businesses across all sectors will not have access to the capital they need to compete, scale, innovate and tackle tough economic conditions. This will only harm local economies and workers. and it will undermine the competitiveness of the United States more generally. “

Manchin and Schumer agreed on Wednesday on a reduced budget that would raise taxes for the wealthy and corporations.

Kerrigan added that the minimum corporation tax of 15% would affect workers and small businesses that depend on large corporations for supplies.

“Our economy is facing dangerous headwinds,” he continued. “American businesses and investors need as much capital as possible to heal supply chains, support their workers and drive through destructive inflation. Rather than racking up painful government costs that ultimately affect workers and small businesses, policies must provide relief and stability. “

U.S. economic growth fell 0.9% in the second quarter after dropping 1.6% in the first quarter, according to a Department of Commerce report released Thursday. The consecutive quarters of negative growth suggest that the US has technically entered a recession.

Chuck Schumer reconciliation project

Senate Majority Leader Chuck Schumer, DN.Y., speaks to reporters on September 28, 2021. (AP Photo / J. Scott Applewhite / AP Press Room)

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Meanwhile, inflation rose 9.1% yoy in June, the highest increase since 1981.

More than half of small businesses reported that inflation is having a substantial impact on their business, while another 35% said it is having a moderate impact, according to a recent survey by the National Federation of Independent Business. According to the survey, rising energy prices negatively impacted 96% of small businesses.

“The so-called ‘Inflation Reduction Act of 2022’ will make 2022 and beyond a painful one for all of America,” Kerrigan told FOX Business. “Instead of reducing inflation, it will fuel it and cause misery for many more Americans.”

Joe Manchin

Senator Joe Manchin, a West Virginia Democrat and chair of the Senate Energy and Natural Resources Committee, speaks during a press conference at the 2022 CERAWeek conference in Houston on March 11, 2022. (F. Carter Smith / Bloomberg via Getty Images / Getty Images)

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Also, on Thursday the Chamber of Commerce, the nation’s largest business advocacy group, encouraged Congress to reject the inflation reduction bill.

“This legislation includes taxes that would discourage investment and undermine economic growth and price controls that would limit American innovation,” said Neil Bradley, Chief Policy Officer of the Chamber of Commerce. “Both will make our economic problems worse.”

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