There is a lot that I don’t know and so much that I don’t understand. I’ve watched the debates, visited websites, and last night I watched the interviews with both presidential and vice-presidential candidates on 60 Minutes.
I come from this perspective as a second-generation small business entrepreneur. Our current business has been operating for close to 19 years, and with the COVID-19 pandemic, we are struggling through a very tough year in business. We’ve applied for government and local grants. We’ve taken out government loans. We’ve cut back hours, payroll, and operating expenses. We are doing what we can to survive.
Listening to the debates and interviews has me questioning all sorts of things, and then some things seem so blatantly obvious. Alarmingly obvious...
As a business, our biggest expense is payroll. Far and away. We hire many part-time college students. We pay above minimum wage and we pay for industry training and certification. We pride ourselves in offering a safe and clean environment for our staff. To incentivize engagement, success, and sales, we pay commission from revenue, adding to the payroll expense. We do it because we see it’s value.
On top of payroll expenses paid to employees, we pay payroll tax to the government. We also pay unemployment tax. This is sure a nice concept, especially during a pandemic when our business was forced closed by the government for 59 days. It sure would have been nice if our staff was allowed to receive those funds that we’ve been paying for the last 18 years, but unfortunately, many of our staff were denied unemployment benefits. (That’s certainly a topic for another post) Each employee also pays income tax.
In 2010, our industry was unfairly singled out with a 10% tax to help pay for the Affordable Care Act. Since it’s inception, that tax has wreaked havoc on our industry — killing over half of the individually owned and operated salons throughout the US. What will more and higher taxes do?
Of course, the government wants to see the minimum wage increase to $15 an hour. The government makes more from taxes this way! Taxing the employer who pays the wages AND taxing the individual making the wage, the government stands to make a LOT more by raising the minimum wage. You know who pays for that? The business.
The small businesses like ours, who already pay the tax, and whose number one expense is already payroll, are looking at nearly doubling its biggest expense.
But that’s not all.
Under the Biden tax plan, corporate taxes will also be raised. This is where I get confused. In the same interview, he explained that corporate taxes will go up 15%, and that money will be used to pay for free college. But in the same interview, he also said he’ll raise corporate taxes from 21 to 28%. So which is it? And who pays for it? The business.
Ok, so all of these tax increases come on the heels of arguably the toughest year many businesses have ever faced. Businesses like ours who were forced closed and who lost substantial revenue are now facing the burden to fund higher wages, free college, and higher taxes.
So maybe you’re not in business or you’re not an entrepreneur. How does all this affect you? Are you employed by a small business? Expect your hours to be cut. Expect your benefits to shrink, maybe even be eliminated. Do you shop at a small business? Expect prices to increase. Expect business hours to shrink.
And watch businesses all over the country begin to close. If they haven’t already during this pandemic.
And then, when they close, those high paying jobs disappear. The payroll tax disappears. The income tax disappears. The unemployment tax disappears. The corporate tax disappears. The goods, services, and community disappear.
Sometimes it’s important to pull your head out of the trees in order to get a glimpse of the whole forest.
I’m not trying to persuade you to vote one way or another. Vote with your heart. Vote for the issues most closely tied to your values.
Just please, know how your vote affects the bigger picture too.
** I am aware that this issue may not affect you. I realize there are many issues that are bigger than this one. I respect that others have different views and certainly do not expect that anyone will share my thoughts and feelings on this topic. Should you feel inclined to comment on this post — on THIS issue, please choose to stay kind, keep to THIS issue, and discuss THIS issue, not people. I will listen. I feel like we all need to do more of that.
*** Also (sadly) I feel the need to share my fear in sharing this post. Why? Because in sharing my thoughts on this very debatable topic, I fear for the vitriol that it may cause. That is not my intention. If someone can share an issue that is important to them, why can I not (or should I not) do the same? I am human too. I have feelings too. I went to college. I paid for college. I pay my taxes. I do not wish to pay more taxes. Should you live or feel differently, that is good too. But please, do not make me feel dumb/inferior/wrong for sharing my thoughts.
**** And remember, whatever the outcome of this election, I’ll still be kind to you regardless of who you vote for.
***** Lastly, consider shopping local, even when Amazon Prime and Walmart Plus exist. We know they’re worth billions. Your local, small businesses are not. Sometimes your purchase is enough to help them stay in business a little longer, providing jobs for your community a little longer. Sometimes, shopping for a lower price actually IS a higher cost in the long run.