The National Federation of Independent Business (NFIB) has outlined the Build Back Better Act (H.R. 5376) as a key vote for the 117th Congress.
In a letter to members of the House, the small business advocacy group said the bill would increase taxes, impose new mandates, and increase penalties on small business owners.
“Small businesses are managing challenges right now, including labor shortages, rising inflation, supply chain disruptions, and COVID-19 variants,” Kevin Kuhlman, NFIB vice president of federal government relations, said. “It is not the time for Congress to impose significant tax increases, inflexible mandates, and massive new civil monetary penalties on small businesses. The small business economy is fragile, and they simply cannot absorb these substantial fines and cost increases.”
NFIB said the legislation expands the 3.8 percent net investment income tax (NIIT) on pass-through business income and applies it to all business income above $400,000 (individual filers) and $500,000 (joint filers). NFIB officials also pointed out that the bill would create a four-week federal paid family and medical leave program for all workers. This would be a considerable change for small employers who are currently not subject to the Family and Medical Leave Act (FMLA).
“In NFIB’s latest tax survey, small business owners shared that federal business income taxes were the most burdensome tax on both a financial and administrative basis. These taxes will divert resources away from job creation, compensation increases, and business investment and further complicate tax compliance,” the letter to members of Congress said.
Further, NFIB officials said the Build Back Better Act increases civil monetary penalties on small businesses for errors related to federal employment law compliance. They also say it increases penalty exposure for employers by expanding the Affordable Care Act’s employer mandate. Further, there is a strict liability standard for Fair Labor Standard Act (FLSA) violations.
Also, NFIB has launched the Small Business Survival campaign, an advocacy effort that highlights why tax increases would be harmful to small businesses.