Small business groups tear up Manchin-Schumer deal: ‘Suffering for many Americans’

Groups representing small business interests blasted the deal Wednesday by Sen. Joe Manchin, DW, saying it would increase inflation and hurt jobs.

The groups argued that the deal, titled the Inflation Reduction Act, would increase pressure on small businesses struggling to stay afloat amid record high prices and slowing economic growth.

The legislation was announced after weeks of negotiations between Manchin and Senate Majority Leader Chuck Schumer, DNI, who said it would guarantee corporations and the wealthy “will pay their fair share.”

“We all know that taxes are going to come down,” Alfredo Ortiz, president of the Entrepreneurs Network, told FOX Business in an interview. “So it’s going to increase costs and ultimately it’s going to be higher prices for the consumer, which is going to be inflationary or it’s going to be job-killing.”

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“Taxes are considered an input to costs,” Ortiz added. “If costs go up, taxes, prices go up, which in turn, affects inflation and the average small business owner, the average American consumer.”

The inflation-reduction legislation approved by President Biden would require an estimated $433 billion in spending, most of which would be spent on climate protection, and would increase tax revenue by $739 billion. The bill would ensure that large corporations pay at least 15 percent in tax, which alone would increase tax revenue by $313 billion, and increase IRS enforcement, increasing tax revenue by another $124 billion.

The law closes the carried interest loophole, which allows private equity executives to pay lower taxes on certain earnings. This offering will increase revenue by $14 billion.

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“The Schumer-Manchin tax hike deal is being sold as a tax hike that will only affect large corporations and the wealthy. Don’t be fooled,” Small Business and Entrepreneurship Council President Karen Kerrigan told FOX Business in an email. “The impacts of these tax increases will be felt and absorbed by ordinary Americans and our nation’s small businesses.

“Increasing taxes on carried interest means that many entrepreneurial firms and small businesses across sectors will not be able to access the capital they need to compete, scale, innovate and navigate challenging economic conditions. This will hurt local economies and workers and significantly reduce America’s competitiveness.”

Manchin and Schumer agreed Wednesday on a cut budget that would raise taxes on the wealthy and corporations.

Kerrigan added that the 15% minimum corporate tax would hurt workers and small businesses that rely on big companies for supplies.

She continued, “Our economy is facing dangerous headwinds. America’s businesses and investors need as much capital as possible to heal supply chains, support their workers, and weather devastating inflation. Ultimately, instead of piling on government spending that hurts workers and small businesses, policies must provide relief and stability.”

U.S. economic growth slowed 0.9% in the second quarter, after falling 1.6% in the first quarter, the Commerce Department reported on Thursday. Consecutive quarters of negative growth mean the US is technically in recession.

Senate Majority Leader Chuck Schumer speaks to reporters, DNA, September 28, 2021. (AP Photo/J. Scott Applewhite/AP Newsroom)

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Meanwhile, inflation rose 9.1 percent year-on-year in June, the highest since 1981.

More than half of small businesses say inflation is having a major impact on their business, while 35% say it’s having a moderate impact, according to a recent survey from the National Federation of Independent Business. High energy prices have negatively impacted 96 percent of small businesses, the survey found.

“The so-called ‘Inflation Reduction Act of 2022’ will make 2022 and all of America painful,” Kerrigan told FOX Business.

Sen. Joe Manchin, Democrat of West Virginia and chairman of the Senate Energy and Natural Resources Committee, speaks during a news conference at the 2022 CERAWeek conference March 11, 2022, in Houston. (F. Carter Smith/Bloomberg via Getty Images/Getty Images)

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In addition, the Chamber of Commerce, the nation’s largest business advocacy group, encouraged the rejection of the Anti-Inflation Act on Thursday.

“This legislation includes price-control taxes that discourage investment and limit economic growth and American innovation,” said Neil Bradley, the chamber’s policy officer. Both exacerbate our economic problems.