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Tax and Authorized Playbook
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With a brand new president, there are all the time adjustments. Whereas a few of these concepts and proposals might sound supreme, they arrive at a price and the authorities should resolve how they are going to be paid for. Typically, the federal government turns to companies to assist fund these initiatives by way of new insurance policies or tax will increase, however what many don’t understand is that small companies can bear the brunt of those adjustments.
Small companies are the spine of America. In reality, based on the Small Enterprise Administration, there are greater than 30 million small companies within the U.S., and comprising 99.9% of all U.S. companies. Regardless of taking part in a key function within the financial system, lots of the proposed insurance policies presently being mentioned will hurt small companies in America. Let’s have a look at the primary of many insurance policies presently being mentioned in Congress.
A push for unions
From the start of his marketing campaign, President Biden declared, “I’m a union man.” So, it may well’t be an excessive amount of of a shock that his American Jobs Plan, which supposedly is about infrastructure, consists of the Defending the Proper to Arrange (PRO) Act that was handed by the Home earlier this yr. The invoice would develop numerous labor protections associated to workers’ rights to prepare and collectively cut price within the office. In reality, the tremendous print places workers in a predicament. Presently, greater than two dozen states have right-to-work legal guidelines in place that permit workers the choice to choose out of unions and never pay their dues. Beneath the PRO Act, unions can override the choice to choose out and pressure workers to pay union dues regardless of not wanting to affix them.
How are small companies affected?
As with many new insurance policies, large firms have the funds and groups to fight almost any change that would doubtlessly hurt their enterprise. However, small companies usually don’t have the monetary capacity to go up towards the powers at be. The financial system wants small companies to not solely survive however thrive within the post-pandemic world, and unions don’t assist their backside line. The PRO Act would make it troublesome to rent unbiased contractors, pressure corporations to subsidize union enterprise, and would make it troublesome to fireplace substandard workers.
Is the President pro-big enterprise?
Whereas Biden claims to help small companies, lots of the insurance policies just like the PRO Act penalize small-business house owners whereas bigger firms stroll away comparatively unscathed. Small companies will be fragile, and extra laws and restrictions on prime of the latest pandemic closures may end in fewer and fewer profitable small companies. In response to a brand new research by the Federal Reserve, an extra 200,000 companies closed prior to now yr as a result of pandemic. Profitable small enterprise house owners are sometimes lumped into the identical class as billion-dollar firms who can higher soak up the elevated prices.
We’d like small companies to succeed now greater than ever to proceed to regain a robust financial system. To take action, the general public wants to grasp the attitude of those enterprise house owners, together with the struggles they’ve confronted within the final yr and Biden’s proposed insurance policies that would devastate them. We’ll proceed to debate these matters and extra in my subsequent article on pandemic insurance policies that basically discourage small companies.