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Meuser: Innovation as a Catalyst for New Jobs, SBA’s Innovation Initiatives
WASHINGTON, D.C. – Today, the Subcommittee on Economic Growth, Tax, and Capital Access is holding a remote hearing titled, "Innovation as a Catalyst for New Jobs: SBA’s Innovation Initiatives."
Subcommittee Ranking Member Meuser's opening statement as prepared for delivery:
Thank you, Madam Chairwoman. Small businesses, entrepreneurs, and startups are resilient organizations that continue to innovate and adapt to the ever-changing marketplaces.
Prior to the COVID-19 pandemic, small business entrepreneurs were opening new factories ,throughout my district and throughout the Commonwealth and the country, and storefronts on Main Street, hiring more workers, creating new jobs, and manufacturing the next great American product or service with rapid speed. This was prior to COVID, in large part, due to the pro-growth policy agenda that empowered innovators and entrepreneurs through reduced regulations and independence in running a small business.
After such a harrowing year for public health that resulted in state and local lockdowns, capacity restrictions, and so many numerous challenges for small business owners, I do believe the entrepreneurship economy can thrive again if we make the right decisions to help create the environment to empower growth.
A recent survey of more than 2,500 Goldman Sachs “10,000 Small Businesses” participants found that “78 percent of small businesses believe 2021 will be better than 2020,” that’s good, but only “36 percent believe it will be better than the economy they knew before COVID-19 hit.” That’s not so good and hopefully that’s where we come in. The pandemic impacted businesses differently based on industry, longevity, location, and other factors; however, meeting small businesses’ workforce and capital needs will be the key to the continued recovery for all sectors.
I believe this can be a “Great American Decade” if we unleash the power of American innovators and entrepreneurs, but we cannot do that under the yoke of untargeted unemployment compensation supplements, government mandates that don’t make sense to business, higher taxes, and runaway inflation that adds a cost to everyone. To this point, I recently wrote an op-ed on “the cost of tax and spend” that I would like to submit for the record.
Unemployment incentives continue to plague small businesses with an unprecedented worker shortage. The U.S. Chamber of Commerce poll, “The COVID-19 Unemployed,” found that roughly half (49 percent) of Americans who became unemployed during the pandemic say they are “not actively or not very actively looking for work” and 61 percent of respondents say they are “in no hurry to return to work.” NFIB’s June Jobs Report found that 46 percent of all small business owners reported job openings they could not fill. That’s the bottom line. As we continue to see small businesses place “Help Wanted” signs on their doors very often that sign is followed by $20/hr or $19/hr or $22/hr, this is a prime reason innovation is limited further and productivity declines.
Small businesses across the nation are also feeling the immediate impacts of inflation, resulting in stretched budgets, higher costs of goods, and supply shortages. Inflations of course being something that is of great concern as raising the costs of businesses. The Alignable Inflation Poll, conducted among 7,735 small business owners from late-April to early-May 2021, found that 80 percent of small business owners say the cost of supplies is up compared to pre-COVID levels, and 22 percent say those costs have increased by 25 percent or more. This is incredibly concerning to the fundamentals of our economy and the vibrancy of small businesses.
As small businesses are reopening their doors only to be met with a labor shortage and inflation storm, there simply could not be a worse time to raise taxes on the American worker. President Biden’s promise to repeal President Trump’s Tax Cuts and Jobs Act (TCJA) would immediately raise taxes on small businesses by increasing marginal income tax rates and eliminating the 20 percent small-business deduction. It would also decelerate bonus depreciation, eliminating the ability to deduct capital investment over 10 years.
As well, capital gains is a big issue for small business. It directly impacts the returns an entrepreneur will find in their work but also in the value of their companies. Investing in new ideas and gaining access capital would be mitigated and is filled with risk and uncertainty. By reducing potential returns through higher capital gains taxes, thus disincentivizing investment, and creates additional barriers in seeking access to capital.
We must grow opportunity for our Nation’s entrepreneurs, not government. The SBA’s resource partners and innovation programs that are Congressionally authorized remain important and serve as a valuable tool to small businesses. However, we must continue to examine these programs closely to ensure they are effectively and efficiently serving small business entrepreneurs delivering the value that small businesses need while also actively preventing waste, fraud, and abuse.
I spent my fair share of time in the small business world helping grow a small business. I do know that’s where you can learn the most by dealing directly with small business or being a small businessperson yourself. We as part of this committee and as members of Congress in helping do all we can to create a environment for recovery and for long term growth of small businesses need to listen intently and respond favorably and that is why I am very pleased this committee has been pulled together and we have those testifying that we do. With that, Madam Chairwoman, I yield back.
Subcommittee Ranking Member Meuser's opening statement as prepared for delivery:
Thank you, Madam Chairwoman. Small businesses, entrepreneurs, and startups are resilient organizations that continue to innovate and adapt to the ever-changing marketplaces.
Prior to the COVID-19 pandemic, small business entrepreneurs were opening new factories ,throughout my district and throughout the Commonwealth and the country, and storefronts on Main Street, hiring more workers, creating new jobs, and manufacturing the next great American product or service with rapid speed. This was prior to COVID, in large part, due to the pro-growth policy agenda that empowered innovators and entrepreneurs through reduced regulations and independence in running a small business.
After such a harrowing year for public health that resulted in state and local lockdowns, capacity restrictions, and so many numerous challenges for small business owners, I do believe the entrepreneurship economy can thrive again if we make the right decisions to help create the environment to empower growth.
A recent survey of more than 2,500 Goldman Sachs “10,000 Small Businesses” participants found that “78 percent of small businesses believe 2021 will be better than 2020,” that’s good, but only “36 percent believe it will be better than the economy they knew before COVID-19 hit.” That’s not so good and hopefully that’s where we come in. The pandemic impacted businesses differently based on industry, longevity, location, and other factors; however, meeting small businesses’ workforce and capital needs will be the key to the continued recovery for all sectors.
I believe this can be a “Great American Decade” if we unleash the power of American innovators and entrepreneurs, but we cannot do that under the yoke of untargeted unemployment compensation supplements, government mandates that don’t make sense to business, higher taxes, and runaway inflation that adds a cost to everyone. To this point, I recently wrote an op-ed on “the cost of tax and spend” that I would like to submit for the record.
Unemployment incentives continue to plague small businesses with an unprecedented worker shortage. The U.S. Chamber of Commerce poll, “The COVID-19 Unemployed,” found that roughly half (49 percent) of Americans who became unemployed during the pandemic say they are “not actively or not very actively looking for work” and 61 percent of respondents say they are “in no hurry to return to work.” NFIB’s June Jobs Report found that 46 percent of all small business owners reported job openings they could not fill. That’s the bottom line. As we continue to see small businesses place “Help Wanted” signs on their doors very often that sign is followed by $20/hr or $19/hr or $22/hr, this is a prime reason innovation is limited further and productivity declines.
Small businesses across the nation are also feeling the immediate impacts of inflation, resulting in stretched budgets, higher costs of goods, and supply shortages. Inflations of course being something that is of great concern as raising the costs of businesses. The Alignable Inflation Poll, conducted among 7,735 small business owners from late-April to early-May 2021, found that 80 percent of small business owners say the cost of supplies is up compared to pre-COVID levels, and 22 percent say those costs have increased by 25 percent or more. This is incredibly concerning to the fundamentals of our economy and the vibrancy of small businesses.
As small businesses are reopening their doors only to be met with a labor shortage and inflation storm, there simply could not be a worse time to raise taxes on the American worker. President Biden’s promise to repeal President Trump’s Tax Cuts and Jobs Act (TCJA) would immediately raise taxes on small businesses by increasing marginal income tax rates and eliminating the 20 percent small-business deduction. It would also decelerate bonus depreciation, eliminating the ability to deduct capital investment over 10 years.
As well, capital gains is a big issue for small business. It directly impacts the returns an entrepreneur will find in their work but also in the value of their companies. Investing in new ideas and gaining access capital would be mitigated and is filled with risk and uncertainty. By reducing potential returns through higher capital gains taxes, thus disincentivizing investment, and creates additional barriers in seeking access to capital.
We must grow opportunity for our Nation’s entrepreneurs, not government. The SBA’s resource partners and innovation programs that are Congressionally authorized remain important and serve as a valuable tool to small businesses. However, we must continue to examine these programs closely to ensure they are effectively and efficiently serving small business entrepreneurs delivering the value that small businesses need while also actively preventing waste, fraud, and abuse.
I spent my fair share of time in the small business world helping grow a small business. I do know that’s where you can learn the most by dealing directly with small business or being a small businessperson yourself. We as part of this committee and as members of Congress in helping do all we can to create a environment for recovery and for long term growth of small businesses need to listen intently and respond favorably and that is why I am very pleased this committee has been pulled together and we have those testifying that we do. With that, Madam Chairwoman, I yield back.
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