4 Ways Biden’s ‘Build Back Better’ Agenda Could Impact Small Businesses
Last week the White House unveiled a “Build Back Better” program designed to help small businesses compete in the aftermath of the COVID-19 pandemic. The plan is heavy on tax reform and also includes programs that aim to make it easier for small businesses to attract workers and access capital and expertise.
In a fact sheet released to the public on Aug. 19, the White House said that “while Main Street is roaring back, many small businesses struggle to grow and compete globally due to a tax code that disproportionately benefits multinational corporations and a financial system that prevents millions of entrepreneurs from obtaining sufficient capital to start and expand operations. President Biden is committed to changing that.”
The fact sheet also said Biden’s agenda “will protect 97%” of small business owners from income tax rate increases, implying that 3% will face increases. It added that “the revenue raised from creating a fairer tax system for Main Street will help pay for investments that will grow our economy and create jobs, including investments in small business.”
Here’s a quick look at four key areas the White House outlines in the Build Back Better agenda that might help small businesses:
Create a Fairer Tax Code
The White House plans to reform the current tax system, which it says “unfairly prioritizes large multinational corporations over Main Street American small businesses.” Proposals include the following:
- Raise the corporate income tax rate to 28%
- Strengthen the global minimum tax for large multinational corporations
- Reduce incentives for foreign jurisdictions to maintain ultra-low corporate tax rates by encouraging global adoption of robust minimum taxes for large corporations
- Enact a 15% minimum tax on book income of large, highly profitable corporations
- Eliminate incentives for large corporations to offshore profits and jobs
- Ramp up enforcement to address tax avoidance among large corporations
Implement a National, Federally-Funded Paid Leave Program
The Build Back Better plan would guarantee 12 weeks of paid parental, family and personal illness/safe leave by the 10th year of the program. It would also ensure workers get three days of bereavement leave per year starting in year one. Under Biden’s proposal, wage replacement would also come from the federal government — not the employer — which the White House says would “(eliminate) any potential burden on small businesses.”
Increase Small-Business Access to Contracting, Capital and Technical Assistance
One aim of Biden’s plan is to increase access to federal contracts and invest in new financing and technical assistance programs that will directly benefit small businesses. These are some of the proposals:
- Increase federal contracting opportunities for small businesses.
- Create a national network of incubators and business development centers to help more entrepreneurs start up new businesses, access government contracts and expand their customer bases.
- Ask Congress to invest in federal programs that empower small firms to participate in federal research and development initiatives that have the potential for commercialization.
- Help minority-owned manufacturing businesses access capital.
- Create a new financing facility for small manufacturers.
- Increase access to lending and investment capital by injecting billions of dollars in funding into the Small Business Administration’s 7(a) loan program.
Expansion of the Child Tax Credit Plan
The Build Back Better Agenda is designed to help 97% of small business owners avoid income tax increases. It also aims to extend the Child Tax Credit in the American Rescue Plan, which the White House says will benefit more than 3 million small business owners with children.
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