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small business
'There Will Be Pain': How Trump Tax Giveaways to the Rich Hurt Small Businesses and Working People
"Congress has a choice—they can either extend a failed policy or create tax reform that actually works for Main Street and communities."
Feb 13, 2025
As the Trump administration and congressional Republicans pursue trillions of dollars in new tax giveaways for wealthy individuals and corporations, economists and pollsters this week are warning about how devastating the GOP's plan would be for small businesses and working families.
There Will Be Pain is the matter-of-fact title of a Thursday report from Josh Bivens, chief economist at the Economic Policy Institute (EPI). It details how extending the expiring provisions from the tax law that Republican lawmakers passed and Trump signed in 2017 "will have painful trade-offs for the U.S. economy and most Americans."
"The U.S. 'fiscal gap'—how much taxes need to be raised or spending cut to keep public debt stable as a share of gross domestic product—was entirely created by the Republican tax cuts of 2001, 2003, and 2017," Bivens wrote. "The 'tax gap'—the amount of taxes owed but not paid each year—is currently larger than the overall fiscal gap. It is driven by the richest U.S. households and businesses cheating the law and underpaying taxes."
Extending the Tax Cuts and Jobs Act (TCJA) provisions, currently set to expire at the end of this year, "would increase the fiscal gap by nearly 50%, from 2.1% to 3.3%," Bivens explained. "No matter how these tax cuts are financed, the result will hurt most working families, especially low-income households."
"Cuts to key social insurance and income support programs like Supplemental Nutrition Assistance Program (SNAP, commonly called food stamps) or Medicaid would do substantial damage to the nation's future workforce by depriving millions of children today of key health and developmental supports," he warned.
"Further, cuts of this size, if phased in quickly, would at minimum require the Federal Reserve to aggressively cut interest rates to avoid a recession," Bivens continued, "and could quite easily overwhelm any attempt by the Fed to buffer the economy from their effect, leading to recession and job losses."
The Republican playbook offers normal people crumbs and gives the cake to the rich. Extending Trump's 2017 tax cuts will give the bottom 60% $1.10 per day - but will give the top 1% $165 per day. Paying for this generosity to the top will cost working families dearly.
— Economic Policy Institute ( @epi.org) February 13, 2025 at 12:21 PM
Bivens argued that "expanding public investment and raising federal revenue via taxes that mostly come from high-income households is the most optimal way to close fiscal gap, boost economic productivity, and produce a fairer economy."
"If TCJA expansions for the rich are inevitable, this leaves three options: running deficits, increasing regressive taxes (in the form of tariffs, for example), or spending cuts," he added. "While none of these options is ideal, running deficits has the potential to be less harmful for American families, whereas regressive taxation and spending cuts will categorically cause the most harm."
The think tank published Bivens' report as a national coalition, Small Business for America's Future, released its findings from a survey of 863 small business owners' sentiments on the tax code, conducted from mid-December to late January.
The survey shows that just 3% of small business owners hired more workers as a result of the TCJA, 6% increased investments or employee wages, and 9% were able to pay down debts. Meanwhile, 43% reported no positive impact from the 2017 law.
The coalition found that small business owners are critical of the U.S. tax code in general and the TCJA specifically. Of those surveyed, 91% of said the tax code "favors large corporations over small businesses" and 76% report that wealthy individuals and big companies benefited most from the 2017 law, which critics have long called the "GOP Tax Scam."
The TCJA's small business pass-through deduction lets owners exclude up to 20% of their qualified business income from federal income tax. However, critics have called it complex and the survey shows that 39% of owners weren't sure if they claim the benefit.
The survey also highlights solutions that are popular with owners, such as exempting the first $25,000 of profit from federal income tax, creating a simplified standard deduction, making the tax code less complicated, and modernizing the Internal Revenue Service. Additionally, 61% of respondents support raising the corporate tax rate to pay for new small business tax benefits.
"By slashing the corporate tax rate permanently from 35% to 21%, while offering most small business owners only a temporary and complex 20% tax deduction, the TCJA created a two-tier tax system that overwhelmingly favored large corporations," said Walt Rowen, co-chair of Small Business for America's Future and president of the Susquehanna Glass Company in Pennsylvania.
"This isn't just hurting business owners—it's failing workers, families and local economies in every community across the country," Rowen added. "Now, Congress has a choice—they can either extend a failed policy or create tax reform that actually works for Main Street and communities."
The GOP controls the White House and both chambers of Congress, but those surveyed by the coalition were divided in terms of political parties: 23% said they didn't know or preferred not to say while 29% identified as Republicans, 25% as Democrats, and 19% as Independents. More than three-quarters were age 55 or older, 56% were white, and just over half were men. A quarter of owners listed themselves as the only employee, and nearly half had just 1-10 workers.
"Small businesses create jobs, drive innovation, and provide essential services in every community across America. But this law has done nothing to help them fulfill their potential," said Anne Zimmerman, a coalition co-chair and certified public accountant in Ohio. "When nearly 40% of small business owners can't even determine if they received the law's main small business tax deduction, while large corporations got an immediate and permanent tax cut, something is fundamentally wrong with our approach."
The small business survey and EPI's report followed polling released Tuesday by Data for Progress, Groundwork Collaborative, and the Student Borrower Protection Center that shows a majority of Americans believe not only that the rich pay too little in taxes but also that lawmakers shouldn't slash popular programs to give them more tax cuts.
"Americans might not always see eye to eye, but one thing's clear: Nearly every voter—across party lines—wants to protect Medicare, Medicaid, Social Security, and SNAP," said Groundwork Collaborative. "Meanwhile, the GOP is pushing to gut them for even more tax breaks for the wealthy."
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'A Virtuous Cycle': Local Business Owners Celebrate 2025 Minimum Wage Hikes
“The minimum wage increase will recirculate back into the economy through spending at the main street shops that make up the fabric of our communities,” said one business owner in New York.
Dec 30, 2024
With 23 states and the District of Columbia slated to increase their minimum wages by the end of 2025, the national network Business for a Fair Minimum Wage reports that business owners in states around the country are cheering those increases, saying they will boost consumer spending and hiring, increase productivity, help retain employees, and in general strengthen the economy.
According to a statement Business for a Fair Minimum Wage issued on December 12, the following states will have either a planned or indexed minimum wage increase on January 1: Alaska, Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Michigan, Minnesota, Missouri, Montana, Nebraska, New Jersey, New York, Ohio, Rhode Island, South Dakota, Vermont, Virginia, and Washington.
Florida, Oregon, and the District of Columbia will see increases later in the year, and some states like Alaska will experience multiple wage floor increases during 2025, per the statement.
Voters in Alaska and Missouri approved ballot measures in November that greenlit increases to the minimum wage. Hundreds of business owners in those two states worked with Business for a Fair Minimum Wage to support the ballot initiatives, according to the statement.
"Workers are also customers and minimum wage increases boost consumer buying power. They go right back into the economy as increased spending at local businesses," said Holly Sklar, the CEO of Business for a Fair Minimum Wage.
She added: "State raises are vital for workers, businesses, and communities as the federal minimum wage remains stuck at just $7.25, falling further and further behind the cost of living." The federal minimum wage hasn't budged since 2009, when it was raised to $7.25.
One business owner, Erik Milan, whose music store Stick It In Your Ear is based in Springfield, Missouri, praised the state's increase. "Raising Missouri's minimum wage will be good for workers and businesses. When workers in our community are paid more, they can spend more at local businesses ... Thanks to better wages and paid sick time because of Proposition A, businesses will also benefit from lower employee turnover, increased productivity, better health and morale, and better customer service," he said, per the statement.
Because of Proposition A, Missouri will increase the state minimum wage to $13.75 an hour on January 1 for private and non-exempt employees, and then increase it again to $15 in 2026. Beginning in May of this coming year, employers are required to give employees one hour of paid sick time per 30 hours worked.
Over in Alaska, the owner of Waffles and Whatnot in Anchorage, Derrick Green, said that "Alaska's minimum wage increases will help Alaskans thrive ... The more that people can make a living in Alaska, the stronger our businesses and communities will be."
Same as Proposition A, Alaska's Ballot Measure One mandates that workers will be able to earn one hour of paid sick time for every 30 hours worked. Alaska's minimum wage was already set to increase on January 1, and then thanks to Ballot Measure One it will increase again on July 1 to $13 and then again to $14 in July 2026.
The statement from Business for a Fair Minimum Wage in total quotes 11 business owners touting the wage floor increases, including Jessica Galen, owner of Bloomy Cheese & Provisions in Dobbs Ferry, New York.
"The minimum wage increase will recirculate back into the economy through spending at the main street shops that make up the fabric of our communities. It's a virtuous cycle. When we take care of our employees, they take care of us," she said.
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US Chamber of Commerce Is Big Business Masquerading as Mom and Pop Shops: Report
"Instead of representing the interests of Main Street, the Chamber represents the interests of Silicon Valley and Wall Street," said a government watchdog.
Apr 26, 2023
A Wednesday report on who funds the U.S. Chamber of Commerce reveals that the vast majority of donors to the powerful business lobbying group remain anonymous on government forms—but the number of large donations received by the Chamber annually raises serious questions about whether the group truly represents the interests of small businesses, considering that nearly half the money donated in 2021 came from just 46 contributors who gave $1 million or more.
The Chamber "boldly claims to represent the interests of over 3 million businesses across the country," said consumer advocacy watchdog Public Citizen in its report, The Interests of the Few.
But just 3% of the nearly $198 million in donations received in 2021 amounted to less than $5,000 each. The rest appeared on the Chamber's 990 Internal Revenue Service (IRS) form as itemized contributions with redacted donor names.
Over $93 million of the money raised in 2021 came from donors who gave at least $1 million, and "the very top of the Chamber's donor base reveals an even more startling picture," Public Citizen wrote, with the top 1.4% of donors providing "more than a quarter of the Chamber's itemized contributions.
On average, the Chamber received $146,000 from each donor.
"How many dry cleaners, pizzerias, or mom and pops shops can afford to give the Chamber hundreds of thousands of dollars? It's not happening," Lisa Gilbert, executive vice president of Public Citizen, toldCNBC.
Research from the JPMorgan Chase Institute released in February showed that the average small business is surviving on a month-to-month basis and has only enough cash reserves to stay afloat for 27 days without additional income.
Judging from the Chamber's 2021 IRS forms, Gilbert said, "we expect its top donors are among a who's who of Big Tech, Big Oil, and other highly consolidated industries."
"Instead of representing the interests of Main Street, the Chamber represents the interests of Silicon Valley and Wall Street," she added.
Eighteen donors who gave between $2 million and $4 million each were behind more than a quarter of the money donations given to the group. Roughly $54 million came from these contributors, the report states.
The top three "mystery donors," said Public Citizen, provided the Chamber with 8.3% of its contributions in 2021, giving an average donation of more than $5 million.
"We believe it's reasonable to assume that these three mystery donors wield a significant influence on the Chamber's actions and activities," said the watchdog.
The Chamber has lobbied aggressively against the Consumer Financial Protection Bureau's funding structure, Build Back Better agenda, antitrust and environmental regulations, and the Inflation Reduction Act.
Despite its donations overwhelmingly coming from contributors that can afford spending thousands of dollars to back a group that helps them avoid complying with protections for public health, workers', and the environment, said Public Citizen President Robert Weissman, "the U.S. Chamber of Commerce likes to make a big deal about how it represents small business."
\u201cThe US Chamber of Commerce likes to make a big deal about how it represents small biz. \n\nBut its tax filings show 1/2 its budget comes from just 46 donors giving $1 million or more.\n\nhttps://t.co/wiBF1DBxu9\u201d— Robert Weissman (@Robert Weissman) 1682521289
"The narrow donor base casts serious doubts on the Chamber's repeated claims that it represents such a broad range of business," said Gilbert in a statement.
Public Citizen called on the Chamber to "begin freely disclosing the identity of its donors," end its support for fossil fuel projects like the Keystone XL pipeline, "reverse course and begin encouraging more thorough and robust antitrust enforcement," and "focus its efforts overall on policies and actions that benefit the whole of the business landscape, rather than just the largest corporations."
"The Chamber's mission statement claims, 'For all of the people across the businesses we represent, the U.S. Chamber of Commerce is a trusted advocate, partner, and network, helping them improve society and people's lives," the watchdog noted. "It's time for the Chamber's actions to match its mission."
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