Small Businesses: The Forgotten Victims of Overbearing Regulations
As we recently celebrated the annual “Small Business Week,” a time to acknowledge the contributions of small entrepreneurs, it’s disheartening to note that the Biden administration’s regulatory onslaught has overshadowed the occasion. Despite enduring the hardships of COVID-19, inflation, energy crises, and labor shortages, small businesses now face an unrelenting assault from their own government.
Unwarranted Targeting: The “Junk Fee” Obsession
Instead of addressing the root causes of inflation, the administration has shifted blame onto private businesses, fixating on “junk fees.” These are service charges that certain industries impose, which the administration deems unfair. While unexpected costs can be frustrating, consumers have the freedom to shop around for more competitive alternatives.
However, the administration’s blanket approach risks stifling innovation and creating a one-size-fits-all mentality that does more harm than good. As Bharat Ramamurti, former deputy National Economic Council director, revealed, “junk fees” were highlighted not because they are a pervasive problem, but rather because they were a politically popular target.
Misguided Ban on Non-Compete Agreements
In another questionable move, the Federal Trade Commission (FTC) under Chair Lina Khan has banned non-compete agreements without considering their multifaceted nature. While some may view such agreements as restrictive, they play a vital role in preventing corporate espionage and fostering fair competition. Companies invest heavily in employee training and intellectual property, and non-competes help protect these investments from being exploited by competitors.
The FTC’s unilateral ban faces legal challenges and an uncertain future, highlighting the ideological overreach that has characterized Khan’s leadership.
Tax Hikes on the Horizon
Most concerning for small businesses is President Biden’s intention to let the Trump-era tax cuts expire at the end of next year. This move would increase the tax burden on virtually everyone, including small businesses.
The 2017 Tax Cuts and Jobs Act not only reduced overall tax rates but also expanded family-oriented credits and introduced the Section 199A small business deduction. These tax cuts have provided much-needed relief, allowing small businesses to expand, increase salaries, and prepare for uncertainties.
Economic Alarm Bells
As the government pursues these harmful policies, the economy is sending out alarming signals. Gross domestic product growth has fallen short of expectations, and inflation continues to rise. The specter of “stagflation” looms, combining economic stagnation with rising prices.
Public sentiment is equally sobering. Polls indicate that a majority of Americans view economic conditions negatively, and Biden’s approval ratings on inflation and the economy are abysmally low.
A Break from Politics
Despite these mounting challenges, the Biden administration continues to pursue a political agenda at the expense of small businesses. A focus on sound economic policy that promotes growth and prosperity would serve both the economy and the political interests of the administration.
Small businesses are the backbone of our economy, creating jobs, fostering innovation, and contributing to local communities. By embracing pro-small business policies and ditching the regulatory overreach, the government can help these enterprises thrive and ignite economic recovery.
Data sourced from: foxbusiness.com
