In the coming days, the US Senate is likely to consider the Inflation Reduction Act, a landmark agreement between Senator Manchin (D-WV) and Majority Leader Schumer (D-NY). This legislation furthers the Biden-Harris administration’s goal of supporting Americans and small businesses from the outset by cutting health care costs for millions, reducing deficits, investing in domestic energy production and production, and sustaining long-term address tax differentials that benefit the richest companies.
As these initiatives address many of the long-standing issues affecting their bottom line, it’s no surprise that small business owners across the country find the Inflation Reduction Act appealing.
dr. Erika Gonzalez, CEO, President, and Co-Founder of South Texas Allergy and Asthma Medical Professionals (STAAMP) and STAAMP Clinical Research in San Antonio, spoke in support of the bill and said the legislation, “will lower businesses’ bottom line and enable them to to be more competitive in the labor market. I am pleased to see that the Inflation Reduction Act includes a reduction in the cost of prescription drugs, which is a major driver of health care costs and remains the No. 1 policy issue for small businesses.”
Like dr. Gonzalez pointed out, one of the critical measures in the Inflation Reduction Act focuses on rising health care costs. A Recent Small Business for America’s Future questionnaire found that 83% of small business owners said rising health insurance policies have negatively impacted their business, forcing them to raise prices and hold back their growth. The Inflation Reduction Act is helping to tackle rising health care costs in several ways. The first is by extending the Affordable Care Act grants for another three years and the second is by allowing Medicare to negotiate drug prices.
In addition, the legislation limits out-of-pocket costs for Medicare and ensures that companies don’t arbitrarily raise prices faster than inflation. A recent Kaiser study found that prices were above inflation for half of all drugs covered by Medicare in 2020.
“Because we are committed to attracting and retaining talented employees, we offer comprehensive health insurance. But health care costs are skyrocketing and in turn limiting our growth as a company. It’s true that small businesses are the backbone of the U.S. economy, but we shouldn’t bend over backwards just to stay in business,” said Carling McManus, owner of CEO 84 Agency in Charleston, WV, when speaking about why they are shutting down health facilities. supports. of the legislation.
Small business owners generally never ask for benefits, but they do ask for a level playing field, especially when it comes to taxes. This legislation does that by closing critical loopholes, setting a minimum corporate tax rate of 15%, and providing $124 billion to the Internal Revenue Service for tax enforcement. This minimum corporate tax rate does not affect small businesses. In fact, it will only raise taxes on nearly 200 companies that make more than $1 billion in profits and pay less than 15% in federal taxes. Major US industries are behind this wise move to level the playing field in corporate tax. In an article in The hillMichael Hanson, Senior Executive Vice President for Public Affairs at the Retail Industry Leaders Association, said: “The agreement reached achieves all the goals retailers have set out to achieve during the corporate tax debate: permanent lower rates, fairness to ensure all contributions, and better enforcement to collect what is legally owed.”
And small business owners agree. Loopholes and tax breaks for large companies are creating a huge deficit in our country’s budget that is being filled by small businesses and the middle class. We need changes to ensure that large companies pay their fair share. The Inflation Reduction Act does just that said Christine Chin Ryan, owner of Synergy Consulting, Inc., in Portland, OR.
The Inflation Reduction Act is also investing about $300 billion in deficit reduction. This, in turn, will help reduce inflationary pressures that drive up prices for both companies and their customers.
Small business owners aren’t the only ones who think this legislation is good economic policy. Economists share their views. On Tuesday, 126 of the nation’s top economists, including seven Nobel laureates and two former secretaries of the US Treasury Department, sent a letter to congressional leaders who support the Inflation Reduction Act. They wrote: “This proposal addresses some of the country’s biggest challenges at scale. And because it is narrowing deficit, it does so while putting downward pressure on inflation. We strongly urge Congress to act decisively to build a stronger economy by passing the Inflation Reduction Act as soon as possible.”
Former Treasury Secretary Larry Summers agrees that this legislation is moving in the right direction. Last week he has tweeted“Less demand, more supply and directly better bargaining for lower prices – those are the things involved in reducing inflation. The bill reduces the deficit and the level of demand in the economy, lowers drug prices recipe and increases supply by stimulating energy production.”
It’s no secret that rising inflation is generally affecting small business owners, working families and other vulnerable populations. While America is doing reasonably well compared to other developed countries, we need to address these issues with legislation that takes bold steps to tackle inflation and address core issues: health care costs, energy costs, and a fairer tax system. While some who represent certain corporate interests in Washington disagree, many American industry and business leaders, small business owners and economists believe there is much in this legislation that will move our country forward.