“Surprise!” Stealth Tax Hike on SMBs in the Manchin-Schumer Bill

By SBE Council at 6 August, 2022, 10:09 pm

NEWS

For Immediate Release

Washington, D.C. - Small Business & Entrepreneurship Council (SBE Council) president & CEO Karen Kerrigan issued the following statement on a newly discovered stealth tax on small to mid-size businesses (SMBs) that was slipped into the "Inflation Reduction Act" being considered by the U.S. Senate this weekend:

"Make no mistake, the 15% book minimum tax on 'large businesses' is a bad idea. It will have a downstream impact on small businesses suppliers to larger companies and will harm the small businesses that operate in the local communities where these larger enterprises are headquartered or have a significant presence. Again, this book minimum tax and all other tax increases in the Manchin-Schumer package are pernicious, especially as U.S. firms and our economy face headwinds that are intensifying. Now we have learned that Democrats have slid in a $35 billion tax increase and change to the Manchin-Schumer package - one that directly targets SMBs with the minimum tax. Any business that has private equity in its capital structure is now considered a subsidiary of that firm and thus subject to the 15% book tax.

"Rather than targeting 'only 200 corporations' as Democrats contend, this provision will impact thousands of SMBs.

"The Manchin-Schumer deal is a very bad package to begin with, and this destructive measure that directly hits SMBs will greatly add to the challenges and burdens that entrepreneurs are facing in this unstable economy. Every member of the U.S. Senate who claims to support the growth of small businesses should carefully scrutinize the details of the Manchin-Schumer package more closely, and that includes this harmful provision."

CONTACT:

Karen Kerrigan, [email protected]

SBE Council is nonpartisan advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. For 28 years, SBE Council has worked on and advanced a range of private sector and public policy initiatives to strengthen the ecosystem for strong startup activity and small business growth. Visit www.sbecouncil.org for additional information. Twitter: @SBECouncil

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