The COVID pandemic has crushed North Carolina small businesses. In one recent survey, 60 percent of Raleigh area small business owners said they were facing closure.
At the state level, Governor Roy Cooper has done his part to help. Last month, he announced a program to provide $40 million in relief and help businesses pay their rent and other bills. More recently, he announced another $12 million in aid targeted to minority and women-owned small businesses.
While Governor Cooper has been a friend of business, the same cannot be said for the White House and Congress. Small business loans resulting from the Paycheck Protection Program (PPP) dried up months ago, and despite the House passing a relief bill on October 1st, the Senate has yet to act. Even worse, the President has sent conflicting signals about his desire to help, including a tweet that relief could wait until “after the election.”
North Carolina small business owners deserve better. For too many owners, “after the election” will be too late.
While business owners across the state are struggling with the day-to-day realities of keeping their doors open during a pandemic, it is important to remember that the COVID crisis will pass. Those who support small business and job creation must do what we can to help businesses stay afloat right now, but we must also consider what we can do on the policy front to help them thrive long-term. This is especially true with an election just weeks away. For me, the answer begins with supporting Joe Biden and Cal Cunningham.
Joe Biden has embraced a detailed list of proposals designed to help small businesses. His ideas include everything from new assistance for those still struggling to reducing health care costs. Cunningham has promised to fight for a more equitable economy and break down barriers that prevent investments from reaching communities of color and minority-owned businesses.
Both Biden and Cunningham have promised a tax code that prioritizes small business, and both say it is time the wealthy and well-off paid their fair share.
It is easy to see why they take this position. An overwhelming amount of the recent Congressional tax cut went to billionaires and large multi-national corporations. Eighty three percent of the tax cut’s benefits went to the top 1 percent. Ironically, many who reaped these benefits have seen their fortunes swell during the COVID crisis.
It is time to restore balance to the tax code, but we must be careful do it in a way that protects American jobs and savers.
Not every tax idea is a good idea. For example, some have suggested it’s time to increase the dividend tax, the tax paid by shareholders on income produced from dividend paying stocks. On paper, this looks like a tax increase targeted to wealthy investors. In reality, it is seniors, workers and other actors in the economy who bear the cost.
Studies show that an increase in the dividend tax lowers the value of dividend paying stocks. This hurts savers who have made income producing stocks a staple of their retirement accounts. Other studies show that an increase in the dividend tax leads to more borrowing and debt by companies that use dividends to attract investment. New debt would put workers at risk, especially in a recession.
As we build back the economy, it is important to put small businesses first. With so many owners struggling in the pandemic, it’s wrong that they’ve taken a back seat in Washington. In November, we have a chance to change that.