Is there anything in the "big, beautiful bill" for small businesses?
Unfortunately, yes.
Buried within its bigness - a problem in and of itself in that new bills are now kind of like the bundled packages you have to buy if you want the sunroof in a new car that force you to pay for all kinds of other stuff you didn't want and don't want to pay extra for - is a provision that attacks something called the Employee Retention Credit (ERC).
More finely, it will serve to attack small businesses.
The ERC was enacted as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act. signed by President Trump during the last year of his first term. It gave tax relief to businesses that experienced "a significant decline in gross receipts" as result of the lockdowns imposed during the pandemic that particularly affected small businesses as they were the ones locked-down during the pandemic, while large retailers such as Wal Mart were allowed to remain open. The restrictions that required businesses to keep customers at least six feet apart and which limited the number of customers that could be inside at any given time also disproportionately affected small businesses.
The ERC provided relief from payroll taxes for any business that either "fully or partially suspended its operations because of government orders related to COVID-19 that limited commerce, travel or group meetings." It was small businesses that bore the lion's share of the costs of complying with the COVID-era restrictions. Thousands of small businesses went out of business, leaving thousands of Americans unemployed.
Compensating for these government-imposed losses seems not only reasonable but right. Which is why it is arguably wrong to focus government attention - via the IRS - on small businesses that took advantage of the ERC. But that's exactly what the big, beautiful bill will do, if this provision remains buried in the details. Businesses that applied for and got the payroll tax relief under the ERC would be subject to increased audits - ostensibly to identify waste, fraud and abuse, according to proponents. Critics say that's just a cover for rewarding big business by punishing small businesses.
Again. As occurred during the pandemic.
Shark Tank star and small business advocate Kevin O'Leary put it this way during a recent interview on Fox with business anchor Maria Bartiromo: "I read all these bills through the eyes of small business . . . (It) says the IRS will get extended powers to audit small businesses for up to nine years if it took the ERC. Now, that is going to cause chaos in valuations if you have that hanging over your head."
Italics added.
Small businesses would have to worry for up to nine years about being Inspector Javerted by the IRS. Inspector Javert was the police inspector in Victor Hugo's novel, Les Miserables who pursued Jean Valjean to the ends of the Earth for stealing a loaf of bread to feed his sister, who was starving to death. The novel's theme is about injustice meted out disproportionately - upon those least able to defend themselves from it.
The same could be said about the Big, beautiful budget's blinkered focusing on the ERC and the small businesses that have benefited from it.
"It almost seems unfair and un-American to do that to small business," Leary told Fox.
Almost unfair?
The American Small Business League - which fiercely advocates for the interests of America's small businesses - thinks the big beautiful bill "Does for small businesses what fur coats would have done for people on the Titanic. Keep us warm till we sink."
The ASBL argues that, rather than save money, the big beautiful bill will spend it extravagantly, with the main beneficiaries being the same big businesses that saw their profits and market share swell during the COVID-imposed lockdowns and restrictions.
The SBA references a statement issued by the Congressional Budget Office that says the bill "would sharply increase the nation’s debt and deficit over the next decade."
Of course, the president and many supportive congressional Republicans say it will create millions of new jobs annually over the next decade, with many of those jobs being small business jobs. However, this is entirely speculative. No one can say for sure how many jobs will in fact be created - nor where. The only thing that can be said for certain is that federal spending will be increased yet again - and without any meaningful reductions, particularly in areas of the budget such as what is spent on defense is - to borrow one of the president's favorite words - huge and much of that unscrutinized.
The Department of Government Efficiency (DOGE) didn't root out one cent of waste, fraud or abuse at the Pentagon - of which there is surely a great deal more than any irregularities as regards the ERC.
The take home point is that small businesses deserve a break - not to be broken (again) by a bill that may be big and beautiful in the Oprah sense - rather than the sense intended by the president.
