[Congressional Record Volume 167, Number 192 (Tuesday, November 2, 2021)]
[House]
[Pages H6104-H6110]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
LOCAL BUSINESS TAXES, REGULATIONS, AND REDUCED WORKFORCE
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 4, 2021, the gentleman from Missouri (Mr. Luetkemeyer) is
recognized for 60 minutes as the designee of the minority leader.
General Leave
Mr. LUETKEMEYER. Madam Speaker, I ask unanimous consent that all
Members have 5 legislative days to revise and extend their remarks and
include any extraneous material on the subject of this Special Order.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Missouri?
There was no objection.
Mr. LUETKEMEYER. Madam Speaker, I come to the floor this evening with
a number of my Republican colleagues to speak about the small business
economy.
Small business owners have been devastated by the COVID-19 pandemic
as they are still reeling from the Democrat-induced State and local
shutdowns and economic downturn. At a time when Main Street USA has
been focused on recovering from the health and economic effects of the
pandemic, they are facing multiple challenges created by the Biden
administration and congressional Democrats.
Given our country's unprecedented labor shortage, skyrocketing
inflation, and supply chain crisis, small businesses, entrepreneurs,
and startups alike are forced to bear the brunt of the Democrats'
failed economic policies. In the midst of this economic storm, small
businesses should be given the tools to recover, but now they are also
being threatened with major tax increases and more burdensome
regulations.
Since President Biden took office, we have seen multiple Democratic
proposals that include increasing taxes on small businesses. Make no
mistake: Tax hikes, no matter their form and fashion, will negatively
impact Main Street USA.
[[Page H6105]]
A survey by the Small Business and Entrepreneurship Council found a
majority of small business owners believe new taxes will significantly
hurt their ability to recover from the pandemic. Simply put, this is
unacceptable.
While the Democrats' socialist scam reconciliation bill continues to
change week after week, many of these proposals would slash the 20
percent small business deduction enacted by President Trump's Tax Cuts
and Jobs Act of 2017. According to IRS data, millions of small business
owners claimed the 20 percent deduction on qualified business income
during the 2020 tax filing season. This provision created more than $66
billion in savings for small business owners in 2019. The Democrats
want to do away with this.
Other reckless proposals will have nearly doubled the long-term
capital gains rate from 23.8 percent to the top ordinary capital gains
rate of 39.6 percent. According to U.S. Census Bureau data, two-thirds
of small business owners plan to sell their business, and eliminating
the current long-term rate would have enormous implications for any
sale of a small business.
Knowing this information, I must ask: Why would the Democrats propose
such drastic tax rate increases knowing they will crush American
businesses?
As the days evolve, we will see what the Democrats will concoct next
to pay for their outrageous spending, but Republicans refuse to stand
by and allow them to pay for it at the expense of small business
prosperity. We will continue to monitor very closely.
At a time when small businesses are trying to get back on their feet,
they are also absorbing the impact of other damage. As ``Help Wanted''
signs become a common sight on the doors of small businesses across the
country and store shelves become increasingly bare, it remains clear
that the Biden administration's labor crisis is a key contributing
factor to the rising costs of goods and empty shelves.
For months, the Biden administration has paid Americans to stay home
through extended Federal benefits instead of incentivizing these
individuals to return to work. Our country's labor shortages have
hindered the ability to get cargo to shore, unpack these much-needed
goods, and find truck drivers to transport the products throughout the
Nation. U.S. employers across all industries are struggling to fill
more than 10.4 million job openings to meet the rising consumer demand.
Madam Speaker, in October, NFIB reported that 51 percent of small
business owners have unfilled job openings, a 48-year high for the
third consecutive month. Sadly, the historical average is only 22
percent.
As small business owners are bearing the burden of these extreme
challenges due to the Democrats' failed economic policies, they are
also facing regulatory uncertainty. During the previous administration,
we cut burdensome red tape for small firms. However, we are already
seeing an increasing regulatory trend with the Biden administration,
which will hinder small businesses while they are already down.
We know that regulatory burdens deflate small businesses, yet this
administration continues to plow forward with new restrictions and
mandates. From the latest climate rules to the overreaching vaccine
mandate, small business owners should be given the opportunity to
recover from the pandemic and service their customers, not deal with
even more bureaucratic red tape from the Democrats.
Beyond these economic headwinds, American taxpayer dollars have been
wasted and abused by Federal Government agencies throughout the
pandemic. According to the Small Business Administration's inspector
general, $78 billion in Economic Injury Disaster Loans have been
fraudulent.
This program is a direct loan and grant program, as small businesses
apply directly with the SBA for funding. Instead of developing serious
oversight controls, congressional Democrats want to expand the Federal
Government's ability to make additional direct loans through the SBA.
This is dangerous and puts taxpayer dollars at extreme risk. These
proposals are irresponsibly opening the door for enhanced fraud.
My Republican colleagues and I will continue to fight for lower taxes
and deregulation on behalf of small businesses across the Nation while
also safeguarding taxpayer dollars every step of the way. We must
legislate responsibly, and we will. Americans must get back to work,
and that can only happen when Democrats cease their war on Main Street.
Congressional Republicans refuse to stand by and allow the Democrats
to force through this socialist scam reconciliation bill at the expense
of small business prosperity.
I appreciate that a number of my Republican colleagues are here today
to add to this conversation.
Madam Speaker, I yield to the gentleman from Texas (Mr. Williams),
who is the vice ranking member of the Small Business Committee.
Mr. WILLIAMS of Texas. Madam Speaker, I thank the gentleman from
Missouri for yielding to me.
Madam Speaker, I rise today as a small business owner for 51 years. I
still have a business; I still employ hundreds of people; and I want to
be a voice for my constituents in Texas-25 and to call attention to the
dangerous socialist policies--yes, I said socialist--that Democrats
are, once again, trying to jam through the people's House.
President Biden inherited a strong economy from President Trump--
frankly, as good as I have ever seen in 50 years of being in business.
But in less than a year, President Biden and Democrats want to crush
small businesses with higher taxes and increased regulations, extend
supply chain shortages, and keep workers on the bleacher seats with
continued government handouts.
The government should not be paying people to sit on the couch or
imposing tax hikes and regulations that will damage small businesses
that are already struggling with record job openings because of
government giveaways.
As a small business owner, as I said, for over 50 years, I understand
firsthand the negative impacts of increased taxes and how excessive
regulations can hinder growth and kill startup opportunities.
I have seen firsthand how the supply chain crisis is halting U.S.
production. I see it in my business today, in the auto business, which
the Biden administration refuses to acknowledge or let alone address.
Small businesses are hurting. Main Street America is still struggling
to recover, and it is hurting. Banks are trying to provide increased
access to capital, but they are being forced to hire more compliance
officers than loan officers.
Burdensome, overreaching government policies have real impacts on
small business owners and the communities who depend on them. We do not
need the Federal Government to tell entrepreneurs--people who take
risks--how to operate their businesses. Rather, it should foster a
properly regulated economy that creates opportunity for all.
Main Street America is the backbone to our economy, and small
businesses employ more Americans than any other sector there is.
Hundreds of small businesses in my district in Texas and across the
country will experience the negative effects of President Biden's and
Speaker Pelosi's socialist policies--yes, I said socialist policies--as
they chart a course to destroy Main Street, increase taxes, and make
the people more reliant on the government.
Madam Speaker, I will continue to oppose any efforts to raise taxes
or efforts to make it harder for businesses to compete. I encourage
Democrats to end their relentless campaign to make America more like
China and Russia. It just doesn't work. But competing with less
government regulation does. The bottom line is: Risk and reward equal
the American Dream.
In God We Trust.
Mr. LUETKEMEYER. Madam Speaker, I thank the gentleman from Texas for
his insights. Being a businessman himself, he understands full well the
problems that they have, the concerns about the bill being proposed,
and the impact of all the decisions that this administration has made
so far.
The key to economic success is economic freedom. That is a keyword,
and you are going to hear a theme of that this evening, Madam Speaker.
{time} 1800
Next, I would like to introduce the gentleman from Kentucky (Mr.
Barr),
[[Page H6106]]
the ranking member of the Financial Services Subcommittee on National
Security, International Development and Monetary Policy. I look forward
to his commentary and his insights. He is instrumental in a lot of the
different things we do there, as well the former chairman of the
Oversight Committee, if I am not mistaken.
Madam Speaker, I yield to the gentleman from Kentucky (Mr. Barr).
Mr. BARR. Madam Speaker, I thank my good friend from Missouri, a real
leader on the Financial Services Committee, and also our ranking
Republican and leader on the Small Business Committee and tireless
champion for America's small businesses. That is where all of the jobs
are created in this country.
For the life of me, Madam Speaker, on the heels of horrible third-
quarter GDP numbers, I don't know why the Biden administration wants to
put new taxes on small businesses. The GDP numbers for the third
quarter were far short of what economists predicted and, yet President
Biden's plan to so-called Build Back Better is actually a $400 billion
tax hike on job-creating small businesses.
The bulk of this comes from an expansion of the 3.8 percent net
investment income tax that is now going to hit active income for these
pass-through businessowners. Democrats want to expand this to
investment income of individuals actively involved in LLCs, S
corporations, and partnerships, those small mom-and-pop Main Street
businesses that really create jobs in our country.
Additionally, the Democrats are also pushing an $800 billion tax hike
on American businesses that will be a gift to China, Russia, Japan, and
Europe, making it better to be a foreign company than an American one.
These crippling tax hikes will kill American jobs, drive economic
activity overseas, and destroy small businesses as they struggle to
recover from the pandemic.
As if this wasn't bad enough, Democrats want to arm the Internal
Revenue Service with $80 billion in additional funds to target American
small businesses and families. So not only will small businesses in
Kentucky have their taxes go up, but they should prepare for an
avalanche of new audits coming their way courtesy of this Big
Government socialist bill.
On top of that, this legislation will only add fuel to the fire of
the burning inflation crisis. This year the Consumer Price Index is up
5.4 percent, the highest in 13 years, but the Personal Consumption
Expenditure Index, less food and energy costs, is up 3.6 percent, well
above the Fed's 2 percent target and the highest in over 30 years.
Madam Speaker, the longer this inflation surge drags on, the risk of
inflation becoming embedded in our economy grows more and more. This
multitrillion-dollar Big Government socialist tax-borrow-and-spend bill
will bury American entrepreneurs in taxes and debt. But one interest
group that will be happy with this Big Government socialist bill, if it
passes, are the unions that fund the Democratic Party.
Tucked inside of this bill is a proposal to provide a $4,500
additional incentive exclusively for union-built electric vehicles.
This provision runs counter to the Democrats' purported goal of
reducing carbon emissions and getting more electric vehicles on the
road. That is because nearly half of all U.S. automotive production
comes from automakers with workforces who have chosen to not unionize.
In fact, of the 60 automakers in the United States who build electric
vehicles, only 2 are unionized. So Democrats are effectively pitting
American autoworkers at union plants against the autoworkers who work
in my congressional district at the Toyota manufacturing plant in
Georgetown, Kentucky, the largest Toyota manufacturing plant in the
world. But small businesses are impacted because small businesses that
are not unionized are part of the supply chain.
So let me be clear: There is no environmental benefit or additional
carbon reduction achieved by favoring union-made vehicles over
nonunion-made vehicles. While Democrats lecture about the need to
provide alternatives to the combustion engine, to gas-powered vehicles,
the irony here is that this bill greatly restricts the ability for tax
credits to actually reach consumers. This is because Democrats are
limiting the tax credit to union-built, U.S.-assembled vehicles and
applying these proposed limitations to the current EV market. Estimates
indicate that only 2 of over 50 electric vehicles would qualify for the
full tax credit.
This is not building back better. This is a payoff to political
supporters. Nearly half of all U.S. automotive production comes from
automakers with workforces that have chosen to not unionize. Why are we
punishing these manufacturers of electric vehicles? Because it is not
about the environment. It is not about promoting electric vehicles. It
is about a political payoff to union supporters of these campaigns.
This provision is nothing more than that; a payoff to the union bosses
who control Democrat politicians in Congress and the Democrat in the
White House.
We should be for small businesses. And if we are for the environment,
we shouldn't discriminate against nonunion automakers and the small
businesses that support nonunion manufacturers like Toyota in
Kentucky's Sixth Congressional District.
I thank my friend from Missouri for his leadership in opposing this
massive tax increase on small businesses and for helping me highlight
the hypocrisy of the supporters of this bill.
Mr. LUETKEMEYER. Madam Speaker, I thank the gentleman from Kentucky.
As you can see and hear from him, his very insightful explanation of
the bill and its provisions, its effects on small businesses and
consumers, he gave a very, very thoughtful explanation of it, and we
appreciate his insights and concerns.
There are lots of problems with the bill, and I appreciate Mr. Barr's
comments.
Next, we have the gentleman from Louisiana, (Mr. Johnson). Mike is
going to be with us here. He is vice-chairman of the Republican
Conference. He is going to continue to explain some of the problems and
pitfalls with this tax proposal that is an unwieldy and, frankly,
harmful bill to our people, our consumers, and especially the small
businesses in this country.
Madam Speaker, I yield to the gentleman from Louisiana (Mr. Johnson).
Mr. JOHNSON of Louisiana. Madam Speaker, I thank my friend, Ranking
Member Luetkemeyer, and all of our Republican colleagues on the Small
Business Committee for leading this very important discussion this
evening. And this is very important.
Madam Speaker, the Democrats' radical multitrillion-dollar agenda is
bad for America. It just is, and we can all see it. The voters can see
that, too. In fact, while we are here right now, there are still voters
lining up just down the road in Virginia. They cannot wait to vote for
their next Governor. It is a race that is currently classified as a
toss-up but it appears to be going very, very well for the Republican
candidate.
The reason this is so noteworthy, the reason everybody in the country
is watching this, the reason that everyone is so excited that it is a
toss-up election is because this is in a State that President Biden won
by 10 points just several months ago. And there are simply no
conclusions to draw other than that the Democrats are leading our
country down the wrong path. That is what the polling says and even the
mainstream media outlets have had to report on that in the last few
days.
It is the content of this tax-and-spend agenda, and not just the
cost, that is especially dangerous for American families and our
economy overall. You just have to think about the harmful effects the
Democrat bill is going to have on our local businesses, many of whom,
by the way, we all know are already operating on shorter hours due to
the current labor shortage. But specifically, the legislation that is
being debated and pushed through even this week is that the Democrats
want to increase OSHA penalties, increase penalties on small
businesses. That is a tax. They want to reduce the pass-through
deduction. That is a tax. They want to increase the regulatory burden
on small business owners at the worst possible time. You know what this
amounts to? A tax. They want to make the child tax credit pay the same
whether you are working or not, which what will that do? Logically, it
will exacerbate the current labor shortage.
So let me repeat. The Democrat bill, in spite of what they are
saying, will definitely increase taxes while prices
[[Page H6107]]
are soaring. It will increase workplace penalties while companies are
trying their best to get back to work, and it will encourage people not
to work while the job market struggles, and our supply chain is slowed
down due to a lack of workers in these critical positions.
There are nearly 32 million small businesses in the United States.
About 350,000 of those are in my home State of Louisiana. They are our
main employer. They employ more Louisianians than any big company or
the government. This is the mainstay. This is the lifeblood of our
economy. You are talking about deli managers and barbershop owners, and
bookstore owners. You name it.
Small businesses across the country had to fight tooth and nail to
survive the COVID-19 pandemic. The last thing this Congress needs to do
is make it more difficult for these businesses.
But that is exactly what our Democrat colleagues are trying to do. As
for the rest of the bill, well, they are still working on it, they tell
us. We heard today there may be some deal on prescription drugs. Who
knows? We have to see how that goes. There have been lots of promises
broken--made and broken--here the last few weeks.
Meanwhile, the Democrats are still trying to include amnesty in this
spending bill. What that has to do with the reconciliation, we have no
idea. Hopefully, the Parliamentarian on the Senate side will put
another kibosh on this. But they want to include tax breaks for wealthy
New Yorkers and just a bunch of terrible ideas.
I have to digress for just a moment and talk about this amnesty
problem, because not only will that be another burden on our small
businesses; not only will it really take jobs away from law-abiding
citizens, but you have to consider the insatiable appetite that our
friends on the other side of the aisle have for amnesty.
We spent about 13 hours in the Judiciary Committee about 3 weeks ago
working on their effort. The Democrats pushed that through to graft
amnesty onto the spending bill. And after all of those hours, near the
very end--late at night--we asked them if there was any end to this
appetite they have for amnesty. We are talking about as many as 10
million illegals who have come across the border. And we brought a few
amendments and we talked about this in our Conference, but we said, you
know, gee, if you are going to grant amnesty and you all have the votes
in the committee to move this through, we understand that, but we just
want to see if there is any limit on who you might include in amnesty.
So we brought an amendment to the bill and said: What if someone is a
known MS-13 gang member? Surely, you would want to exclude them from
your amnesty plan. And I will tell you, every single Democrat on our
committee voted that amendment down. Of course, every Republican voted
``yes.''
Then we said: Well, well, wait a minute. What if somebody is a
convicted is sex offender, somebody coming from another country and
they are a convicted sex offender? Surely, you would not want to
include them in your amnesty plan. Every single Democrat voted ``no''
on that amendment. So I brought an amendment. I said: What if someone
is a convicted criminal, and they are convicted of DUI, driving under
the influence of alcohol and drugs, a terrible crime, as you all have
said in your speeches in recent years? It kills thousands of Americans
every year. It maims hundreds of thousands. Surely, if someone has been
convicted of at least one DUI, you would not want to include them in
your amnesty plan. Every Democrat voted it down.
So we tested it a little further. Okay, what if they have two or more
DUI convictions? Every Democrat voted it down. So I went to 10 or more
DUI convictions, would they be excluded from your magical amnesty plan?
Every single Democrat voted ``no'' on that amendment. Every single one.
There is no limit to what they want to do with this.
The one thing they do know, they want to spend trillions and
trillions of our tax dollars before we know the score on all of this,
before the actual text of the legislation has even been read. They are
ready to roll. Democrats have a mere three-seat majority in this House.
We have a 50-50 split in the Senate. They are acting as if they have
some sort of big majority to radically transform the country, as they
keep telling us. And what they have presented is the most partisan,
most expensive legislation package in the history of this country,
using the slimmest majority possible, and before they even tell the
American people what is in it.
Make no mistake, a toss-up election in Virginia is just a taste of
what is to come for congressional Democrats in 2022 if they do not
immediately ditch this ridiculous spending plan and harmful government
overreach.
I just say this: Today we have a battle that comes down to competing
ideologies and agendas. It is now free-market capitalism versus Big
Government socialism.
Mr. LUETKEMEYER. Madam Speaker, I would like to have a minor
discussion with the gentleman here.
You made a couple of points here with regards to some of the
discussions you had with regards to amnesty. Did one of the questions
that you posed deal with the $450,000 payment that the President is
proposing to all of the folks who come here illegally? Was that voted
on or talked about at all in your discussion?
Mr. JOHNSON of Louisiana. Will the gentleman yield?
Mr. LUETKEMEYER. I yield to the gentleman from Louisiana.
Mr. JOHNSON of Louisiana. So I wish that that proposal had been on
the table before we got out of that particular hearing because we
certainly would have liked to have heard about that. But if you add
that up, you are talking about perhaps $1 million per family, and $1
billion in cost overall, more costs to the American taxpayer.
And by the way, that little payment that the illegal migrants would
be given by the American taxpayer is more than we give to Gold Star
families, persons who have been lost in the line of duty, as you know.
It is more than the victims of 9/11 that they have received for their
pain and suffering. And, of course, those separations are permanent,
not temporary. It is just not right.
Mr. LUETKEMEYER. So we could be giving a $450,000 payment to a MS-13
gang member; is what you are saying?
Mr. JOHNSON of Louisiana. That is what it means, and convicted sex
offenders, and multiple DUI-convicted felons, and everybody else. They
have included them all. There is no limit to it at all. Isn't that
outrageous?
Mr. LUETKEMEYER. It doesn't seem to bother them that they are going
to spend their own constituents' hard-earned tax dollars and give to a
MS-13 gang member up to $450,000. Holy smokes. It blows you away.
Mr. JOHNSON of Louisiana. It is incredible. You can't make this stuff
up.
{time} 1815
Mr. LUETKEMEYER. Madam Speaker, I thank the gentleman for his
insightful discussion and presentation. I am glad he pointed out that
the socialist agenda of this administration is being rejected by the
people of this country. Probably very, very likely, today, we are
seeing the first reaction to that at the polling places. I also
appreciate his talking about the increase in taxes, the negative effect
to small businesses, and the regulations as well.
It is concerning that the comment he made is quite true, because at
this point, we have seen no text and it changes on a daily basis. Yet,
we are going to be asked to vote for that thing, perhaps before we even
get to see what is in it. Seems like I have heard that somewhere
before.
Anyway, let's move on. We are excited to have the gentleman from
Pennsylvania (Mr. Meuser) next to give us his thoughts on the
monstrosity of a bill here and the tax and spending actions of the
administration. Mr. Meuser is the ranking member of the Small Business
Subcommittee on Economic Growth, Tax and Capital Access. I thank him
for being here this evening.
Madam Speaker, I yield to the gentleman from Pennsylvania (Mr.
Meuser).
Mr. MEUSER. Madam Speaker, I thank my good friend from Missouri, the
Republican leader of the Small Business Committee, Mr. Luetkemeyer.
Madam Speaker, I am, as all of us are, I think, deeply concerned
about
[[Page H6108]]
the adverse impacts that the Democrats' budget reconciliation plan, as
it is called, will have on our Nation's small businesses.
Today, small businesses are battling severe labor shortages,
escalating energy costs, inflationary pressures, supply chain
disruptions, and potential mandates that are causing uncertainty and
threatening small businesses' viability. That is happening today.
All Members of Congress should be focused on pro-growth policies to
help empower small businesses, startups, and American entrepreneurs. We
should be discussing a smart deregulatory environment that allows the
smallest firms to operate independently.
Instead, our Democrat colleagues are attempting to push through
completely partisan legislation with trillions of dollars in reckless
spending and over $420 billion, at least, in tax hikes on Main Street
job creators.
Small businesses need better and they deserve better. Approximately
two-thirds of American jobs are created by small businesses, so their
strength is our Nation's economic strength. President Biden continues
to tell business owners, and all of us, that this bill is going to
reduce inflation and create jobs.
This reconciliation bill--by the way, that is reconciliation with a
``W'' because it will do the exact opposite. It will wreck our economy,
unless somehow the President and the Democrats have figured out how to
defy basic economic principles, which is pretty much like trying to
defy gravity.
You cannot disincentive work and create more workers. You can't flood
the economy with more dollars and drive down inflation. This just isn't
how it works. It is against the simple laws of cause and effect.
Presently, we have a labor crisis that is at historic levels. How do
new government programs that disincentivize work support millions of
small business owners who are struggling to fill open jobs?
Has anyone ever met a single small business owner who believes
raising their taxes will somehow help them build back better? The
answer is a resounding no.
Most of us know this firsthand. I worked in small business for years.
I hold regular business townhalls and talk with small businesses every
day. We hold hearings where small businesses are saying the same thing.
Higher taxes, pending mandates, expanding the IRS--that will be a
welcomed addition to their day--inflation, energy costs. I just got a
text from a businessperson sending me a picture of over $4 a gallon
gasoline and saying--well, I won't repeat what he said. Product
shortages and labor shortages are smothering and perplexing American
businesses. Small business owners are literally pulling their hair out.
They are working harder and getting less for it.
Small businesses are not asking us to spend billions on a civilian
climate corps or more IRS agents or amnesty, but they are demanding
that Congress not raise their taxes, not issue confusing mandates, and
that we won't make it more difficult for them not to just prosper but
to survive.
It is time for the Democrats to halt this reckless tax-and-spend
spree that does nothing but exacerbate the numerous crises facing
Americans today. Reconciliation is a bad bill, it has been an even
worse process, and it is truly an insult to small businesses who are
counting on us.
Mr. LUETKEMEYER. Madam Speaker, I thank the gentleman from
Pennsylvania for his insightful remarks, and I appreciate him
quantifying that this is a $420 billion hit to small businesses.
His comment about working harder and making less, we understand the
pandemic caused a lot of dislocation, but we should be past that now.
We should be helping businesses get back on their feet, not kicking
their feet out from underneath them and adding to the uncertainty with
additional rules and regulations.
I am excited now to have one of the newest members of our conference,
Congresswoman Young Kim from California, who is the ranking member of
the Small Business Subcommittee on Innovation, Entrepreneurship, and
Workforce Development. She herself has been a small businesswoman in
the past, and I look forward to her insightful remarks.
Madam Speaker, I yield to the gentlewoman from California (Mrs. Kim).
Mrs. KIM of California. Madam Speaker, I thank Ranking Member
Luetkemeyer for yielding and arranging this very timely Special Order
to discuss how taxes, increasing prices, and the reduced workforce pool
are impacting our Main Street USA, which is the true backbone of our
economy.
I represent California's 39th Congressional District, which lays in
the tri-county area of Los Angeles, Orange, and San Bernardino
Counties. I have the pleasure to represent one of the most diverse
districts in the country that has a very vigorous entrepreneurial
spirit. Unfortunately, it has been trampled down by unclear guidelines
on lockdowns, increased red tape, labor shortages, high inflation, and,
now, a supply chain crisis.
Mr. Luetkemeyer knows very well that a big threat is looming in the
horizon in the form of increased taxes and burdensome regulations
through the partisan reconciliation process.
Instead of working with us to tackle the issues impacting small
business owners and workers, this administration and this House
majority are looking to add more fuel to the fire with fiscal
expansionary measures at a time when economic analysts say that we
could see inflation above 3 percent well into 2022. This is a run on
inflation not seen since the early 1990s.
In my home State of California, parts of the State recorded their
highest average gas prices ever last Friday. Some places are recording
close to $6 per gallon. This is all taking place when some of our
colleagues in the majority are calling for a total domestic ban on gas
and oil production, which would undeniably increase prices for all
goods and services.
To add insult to injury, California recently released its jobs report
showing the highest unemployment rate in the Nation, and unemployment
claims keep increasing.
So let's ask ourselves: Why is California seeing an uptick in
unemployment claims when NFIB is reporting over half of small
businesses have job openings they cannot fill? Why is California seeing
a record number of job creators leaving to establish their businesses
in other States? The answer is very simple. Many are tired of
Sacramento punishing entrepreneurial ventures through some of the
highest taxes in the country and burdensome regulations.
Let's learn from the mistakes enacted in California and instead work
to empower entrepreneurs, job creators, and Main Street. Let's get back
to the path of prosperity, where we are not punishing success, and we
make it easier for individuals and families to establish small
businesses and serve the communities that we all love.
I want to thank, again, Ranking Member Luetkemeyer for his leadership
on our Small Business Committee and for being a fearless advocate for
Main Street USA and entrepreneurs all across the country.
Mr. LUETKEMEYER. Madam Speaker, I thank the gentlewoman from
California for her remarks, and we certainly appreciate her comments.
She made a comment with regards to entrepreneurs. The small business
folks are the entrepreneurs that make our country work. They are
willing to take the risk and invest their own dollars, work long hours,
and wind up being paid last, if at all sometimes.
I am glad she pointed out the lesson that we should be learning from
California. A lot of times we look to California to see what the latest
trends are. Right now, the latest trend is whoever is the last one out,
turn the lights off. So I think we need to be looking at that and
listening to those citizens, those businesspeople, who are leaving the
State due to the high cost of taxes and regulations, just to be able to
work there.
I am excited now to have another new member to our conference, who
also is a member of the Small Business Committee, former State senator
from the State of Wisconsin, Congressman Scott Fitzgerald.
Madam Speaker, I yield to the gentleman from Wisconsin (Mr.
Fitzgerald).
Mr. FITZGERALD. Madam Speaker, the biggest tax increase for small
business in over 50 years--let me say it
[[Page H6109]]
again--the biggest tax increase for small business in over 50 years.
This is what President Biden and my colleagues across the aisle are
proposing in order to pay for part of their multi-trillion-dollar
spending package.
The President and the Democrats have proposed a range of options that
will hurt economic growth and fall on the backs of small businesses,
like raising the corporate tax, raising the individual tax rates,
taxing unrealized capital gains, and giving the IRS authority to spy on
Americans' bank accounts.
In announcing the tax increases, the Biden administration said their
agenda: ``Will protect 97 percent of small business owners from tax
increases, while delivering tax cuts to more than 3.9 million
entrepreneurs.''
But here is the problem. It doesn't add up. The statement doesn't add
up. It doesn't hold up to the scrutiny. The reality is that
approximately 1.4 million small businesses are structured as C
corporations, meaning that they will be subjected to the proposed 28
percent corporate tax rate, as opposed to the current rate of 21
percent.
Let's talk about S corps. If you are not familiar with the S corp or
the LLC, an individual small business owner's taxes flow through the S
corp. So what is going to happen? They are going to increase the
individual tax rate. What will that mean? S corps and LLCs will see an
increase in the amount of taxes that they are paying.
Add in, as my other colleagues have already brought up this evening
on Special Orders, rising inflation rates, increased cost of goods and
services, shipping delays, labor shortages, and these small businesses
will find themselves in a hole. They are trying to jump start
themselves right now out of a pandemic, and we are going to tax them
more? It makes absolutely no sense.
For nearly a decade, I was the owner of a small business. If you
would have told me in 1990, when I started my small business, that I
would be facing labor shortages, tax increases, and supply delays,
guess what? I wouldn't have started a small business. You would be out
of your mind to start a small business under those types of
circumstances.
And guess what? We are seeing that happen in my home State of
Wisconsin. The restaurant industry, gyms, manufacturers, construction
companies, they are all struggling right now. If you are back in the
district and you are talking to people and you are at a chamber meeting
or you are at some type of specific association related to an industry,
they will continue to tell you we are in trouble. Yet, the Biden
administration and the Democrats are looking at tax increases on these
small businesses.
We must give small businesses a chance to succeed. This trillion-
dollar reconciliation package and the subsequent tax increases do just
the opposite.
If my colleagues on the other side of the aisle truly want to save
small businesses, they will drop the spending plan, cut taxes for small
businesses, replenish the Restaurant Revitalization Fund, and drop the
arbitrary vaccine mandate. That is what would get employees back to
work.
These small-business owners deserve an opportunity to chase the
American Dream. As it stands, this reconciliation package will take
that opportunity away from them.
{time} 1830
Mr. LUETKEMEYER. I thank the gentleman for his comments and
insightful remarks. I really appreciate him pointing out something,
that this is the biggest tax increase in 50 years on small businesses.
Let me say that again, the biggest tax increase in 50 years on small
businesses.
In our committee recently we had the Small Business Administration
Director, and one of the members from our committee asked the Director
if she had been advising the administration on the tax policy in this
bill and had done any studies as to the effect of those taxes on small
businesses? We couldn't get a response.
She said, well, it really wasn't something she would be concerned
about. Here is the Director of the Small Business Administration, whose
prime duty is to work this agency for the benefit of small businesses
in this country, and she was not going to think that this bill was
important enough with the taxes and other extraneous things in there to
even think about working on it and advising the administration about
what could happen to small businesses?
There is a huge disconnect within this administration about what is
going on in the real world and the utopian view of how they would like
to have things be in the future under a socialist regime. This is nuts.
How in the world can you put a bill together like this that has this
kind of effect on small business and not even study the effect of it?
Absolutely breathtaking.
I yield to the gentleman from New Jersey (Mr. Van Drew), a small
business person himself. He has experienced some of these hardships and
problems, and he is going to tell us all about what his views are on
this bill and how it can impact his business.
Mr. VAN DREW. Madam Speaker, as we rapidly approach the upcoming
holiday season, which is the busiest time of year for many American
families and for many industries, I am, we all are, greatly concerned
about the state of our country. Gas prices are the highest we have seen
in nearly a decade, forcing families to contemplate if they can afford
to travel for the holidays.
Worse yet, those wishing to travel further are worried that their
flights may be canceled at the last minute because there aren't even
enough pilots to fly the planes.
Those who have saved their hard-earned money for months to buy their
loved ones something special for Christmas worry that their delivery
will be stuck at our backed-up ports.
Make no mistake, all of these crises happening at once are not a
coincidence. They are the result of failed Biden administration
policies and a rejection, a whole-out rejection of the longstanding
values that always made our America great. Authoritarian vaccine
mandates on many vital industries have led to labor shortages on a
massive scale.
Overtaxation on small businesses and their owners through an increase
in the individual tax rate threaten more than 130,000 jobs in an
already struggling job market. Overbearing red tape in this socialist
reconciliation bill threatens to raise penalties on businesses by over
500 percent and will lead to more small businesses going bankrupt,
something we have already seen far too much of over the last 2 years.
This is not what America wants. We are already struggling to sustain
a valuable and available workforce. Democrats' overregulation on our
businesses and government handouts are leading to a cradle-to-grave
welfare state, crippling our country's ability to recover from the
pandemic and once again thrive as the strongest nation on Earth. And it
is all coming to a head. It is all coming to a head this holiday
season.
We cannot continue to weaken American businesses. We cannot continue
to weaken American supply chains. We cannot continue to weaken the
American Dream. We cannot continue to weaken the greatest nation on the
face of the Earth: America. We are the greatest country there has ever
been and ever will be. Why is the left trying so hard, so desperately
to destroy that greatness?
We must get Americans back to work, and we must support policies that
allow our businesses to flourish and not wither away. It is the basis
of America.
I will continue to fight alongside my colleagues to ensure that these
bad, destructive policies and their decades-long consequences are
prevented. We will continue to fight for good policy that opens our
country back up, that gets our people back to work, that makes us
strong and puts America back to the forefront of the world stage.
Mr. LUETKEMEYER. I certainly thank the gentleman from New Jersey for
his remarks and reminding us that inflation is a tax as well. I think
we need to remember that when we go to the gas pump. Last January I was
able to get it for $1.89. On Monday I filled up my tank and it was
$3.19. I got nothing more. I got the same amount of gas. The only
difference is it was $1 and some higher. Inflation is a tax.
I appreciate him reminding us of the work ethic and values that our
small business folks display and have to work
[[Page H6110]]
with every day to make their business work and the effects of mandates.
I appreciate his comments.
Madam Speaker, I yield to the gentleman from Pennsylvania (Mr.
Keller), who has a great personal story himself. I look forward to his
remarks and his concerns about this monstrosity of a bill, socialist
reconciliation bill.
Mr. KELLER. Madam Speaker, I thank Ranking Member Luetkemeyer for
having this Special Order. At a time when we should be doing everything
we can to help small businesses thrive and strengthen America's
workforce, President Biden's radical socialist agenda is driving a
wedge between job creators and the workforce.
Drawing upon 25 years of experience in private industry, working in a
factory, later managing that factory, I understand the challenges that
our businesses face and what it means to get up every day, go to work,
and support a family.
President Biden and House Democrats aren't looking out for American
families. If they were, they would not be working to increase the tax
rates for small business owners or dumping more than a trillion dollars
into the economy. That will only worsen the inflation we have seen and
the supply chain crisis.
This build back better scheme is a farce. It is simply out of
control. Whoever controls more of an individual's money and how they
earn it controls more of their actions. That should be the person who
earns it, not the government.
When you look at these tax policies, when you look at inflation, when
you look at the fact that this administration has taken us away from
energy independence, people are spending more for groceries, they are
spending more for fuel, they are going to spend more to heat their
homes, and that is controlling more of their money because of these
poor policies. The best thing government can do is get out of the way
and return economic independence to the American people.
I thank the ranking member for having this Special Order and allowing
us to point out that we believe in the American people. They built the
greatest economy the world has ever seen. They built the greatest
nation on the face of the Earth, and I just wish that President Biden,
when he talks about being frustrated with American citizens, would get
half as frustrated with China and Russia and the Taliban.
Mr. LUETKEMEYER. I thank the gentleman for his insightful remarks. I
really appreciate his comments. Pouring more money into the economy
just adds to inflation. If we go back and look at the comments by the
CBO when they scored the bill back in February, a $1.9 trillion bill,
they said we didn't need it, that we would have 5 percent growth by the
end of this year if we did nothing. And yet we spent $1.9 trillion and
look at what has happened. We have runaway inflation going on right
now, and we want more money to be spent again. This is nuts.
Government control. I appreciate his comments with regard to that.
This is about government control. It is about controlling the economy
and controlling individuals and controlling businesses. Again, it is
about the belief that the other side seems to believe in the goodness
and greatness of government, and we believe in the goodness and
greatness of our people. I certainly appreciate his comments with
regard to that and reminding us of those salient facts.
Madam Speaker, how much time is remaining?
The SPEAKER pro tempore. The gentleman has 9 minutes.
Mr. LUETKEMEYER. Thank you very much. I shouldn't be too long. We
have rolled this around quite a bit, and we have hit on the high
points, but I do want to make a few closing remarks.
The American people deserve better than this. We are here to be able
to help them, not to harm them. We are here to be able to lift them up
and empower them instead of take power away. We are here to give them
hope, not destroy hope. You do all these things on the positive side, I
think, by empowering them and letting them be who they are rather than
take that away from them and try from the government side to control
what they are doing and who they want to be.
I have the opportunity with one of the positions that I hold here in
Congress to meet with a lot of foreign finance ministers from around
the world, and it is always interesting to talk to them because they
are very jealous of what we have. We have something most countries in
the world don't have, and that is economic freedom. The freedom to be
able to go somewhere tomorrow; if you want to change jobs, go change
jobs. If you want to start a new business tomorrow, go start a new
business. If you want to start another one next week, start another new
business next week. Most places in the world you can't do that, and
that is a huge difference. That economic freedom, that entrepreneurial
spirit that we have in this country makes us different from everybody
else.
This monstrosity of a socialist reconciliation bill is a dagger in
the heart to the entrepreneurs and the small business people in this
country who have built this country. The big businesses, where did they
start from? They started as a small business. They didn't start as a
big, major business to begin with. They started in somebody's garage or
in a university research lab somewhere or as an idea that somebody
scratches on the back of a napkin in a restaurant somewhere. These
people, the entrepreneurs who are willing to put their ideas on the
table, their money, and their beliefs and risk everything to make this
work.
This bill that we are talking about this evening is a dagger in the
heart to those people who are willing to take those kinds of risks and
drive our country forward and provide the jobs.
As a reminder, when we unleashed the power of the people with the tax
cut bill of 2017, we wound up before the pandemic of having 1.2 million
more jobs in this country than we had people to fill them. The first
time in history that we had those sorts of job openings for people to
apply for.
The fundamentals are still there if we don't destroy them, and that
is the key. This bill will destroy those fundamentals. Add to that the
uncertainty that a lot of our good friends and small businesses that
drive this country are concerned about, the taxes will be the burden
that will have to be overcome, and probably will drive a lot of them
out of business.
They are very concerned about the direction of this administration.
They seem to believe, again, in the goodness and greatness of
government. Our side believes in the goodness and greatness of our
people, and we want to empower them and continue to protect them and
work with them.
Madam Speaker, thank you for the opportunity to be here this evening
and for allowing us to have this Special Order. I yield back the
balance of my time.
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