Small businesses, including most family farms that file taxes as individuals, would take a hit from a tax hike President Biden is considering to fund a resurrected Build Back Better spending bill. That from GOP lawmakers on Capitol Hill.
Senate GOP Leader Mitch McConnell argued against the White House raising taxes on family farms and other small businesses to fund a renewed Build Back Better bill, when record inflation could drive the economy into a tailspin.
“And now they want to ‘pour fuel on the flames’ by making it more likely that we go into a recession by raising taxes on all of these businesses, the vast majority of businesses in America, which will only cause them to reduce the number of employees.”
McConnell is threatening to pull support for technology competition bills covering computer chips, already mired in a House-Senate fight, unless the White House relents on Build Back Better.
President Biden is again negotiating with West Virginia’s Joe Manchin to help win the 50 Senate votes needed, plus the tie-breaking vote of the Vice-President, to secure a pre-election win.
But farm state Republicans including Iowa’s Joni Ernst argue a tax hike now, is a bad idea.
“98-percent of Iowa’s businesses are small businesses, most of those being our farmers, those that are involved in Ag. And, at a time when they are facing increase in input costs like fertilizer, just as an example, diesel fuel, it is very detrimental, and it could be extremely impactful in a negative way, to those small family farms.”
Ernst says many not in farming, don’t understand producers’ plight.
“They’re saying, ‘oh, corn’s up, soybeans are up,’ but what they don’t recognize is that, that cost of diesel this spring to get into the fields, and the cost of fertilizer, has really hamstrung a lot of these farmers, and they’re not seeing any margins increasing, even though commodities are up.”
And those prices could soon come down. New inflation numbers at over nine percent, prompting more big interest rate hikes by the Fed, plus a cratering of the Euro against the dollar raising U.S. grain export prices, are now all adding to fears of a recession.