August 23, 2022

Inflation Reduction Act? Or Small Business Targeting?

  • Executive

By Ophelia Garrett

In Brief: 

Once again, Biden has acted in direct opposition to a campaign promise. The new “Inflation Reduction Act” is a cover for taxing the small business owner, and thereby squeezing out small businesses while protecting elite businessmen. 

The Background: 

Back in early 2020 while campaigning against Trump, Biden told CNBC,  “Nobody making under $400,000 bucks would have their taxes raised. Period. Bingo.” 

And now Biden is passing another tax hike bill and those that Biden promised not to raise taxes on — will pay an estimated $20 billion more in taxes over the next decade as a result of the Democrat-pushed $740 billion package, which also sets aside $80 billion to hire 87,000 IRS agents.

Yet according to the Joint Committee on Taxation, between 78% and 90% of the estimated additional $200 billion the IRS will collect will come from small businesses making less than $200,000 annually.  Just 4% to 9% would come from businesses making north of $500,000 a year — meaning the legislation is in sharp contrast  to President Biden’s long-standing claim that he wouldn’t raise taxes on anyone making less than $400,000.

According to the New York Post, “Even if small business owners get everything right, they may still be faced with a headache since part of the IRS expansion will involve sending out more notices and letters to businesses... For individual contractors or small businesses, an IRS letter that they owe more money or made an error on their taxes can put them underwater.”

“The approach here is to double the IRS workforce, take the leash off, and see how much they can collect. I think they’ll collect it but it will be quite painful,” stated Joe Hinchman, executive vice president at National Taxpayers Union Foundation.

Notable Quotes: 

 “The IRS will have to target small and medium businesses because they won’t fight back. The rich have their lawyers and fight it — that’s why the poor are easier to go after.” Joe Hinchman executive vice president at National Taxpayers Union Foundation. 

What do you think?