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Summers on Tax Hikes

Larry Summers has been right on inflation for the past year, but what about his recent comments on tax hikes? Here’s what he told reporters last week:

“I sure wish we could get past this basically ludicrous economic idea that tax increases are inflationary — it’s just not right,” and “The right thing to do is to raise taxes right now to take some of the demand out of the economy.”

S-Corp has argued that tax hikes can be inflationary, and that the House-passed hikes are inflationary, so this argument caught our eye. Did we miss something in the economics?  Is

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2022-07-27T16:10:40+00:00July 27, 2022|

What’s Next for Tax Policy?

Senate Democrats plan to advance a budget reconciliation bill in the coming weeks, but it will not include the $300-400 billion in Main Street tax hikes originally planned.

The decision to scrap the tax provisions – an expansion of the 3.8 percent Net Investment Income Tax and Loss Limitation rules – was made after Senator Joe Manchin presented Democratic leaders with a deal: pass a smaller bill without tax hikes now or continue negotiations into September with the hopes that the inflation and economic outlook improves.  As Yahoo reported:

Joe Manchin is forcing Democrats into a brutal choice: Take a deal

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2022-07-21T19:25:22+00:00July 21, 2022|

Inflation Hits Highs as Small Business Optimism Hits Lows

Today’s news that inflation hit 9.1 percent in June comes a day after NFIB released it latest small business report, and the results are grim. Small business sentiment is down for the sixth straight month and hit its lowest level in nearly five decades. It’s yet another reminder that there could not be a worse time to raise taxes on American employers.

NFIB’s numbers show that employers continue to be extremely pessimistic about the economic outlook. The percent of employers expecting business conditions to improve in the next six months decreased 7 points to a net negative 61 percent,

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2022-07-13T20:20:18+00:00July 13, 2022|

Main Street Opposes Tax Hikes

Today the S Corporation Association joined with more than 200 trade associations to oppose the Senate’s latest efforts to raise taxes on small and family-owned businesses.

The letter was spurred by recent reports that lawmakers are considering a tax increase specifically targeting Main Street businesses: an expansion of the 3.8 percent Net Investment Income Tax (NIIT) to include the incomes of S corporations and partnerships where the owners actively manage the business.

The letter was signed by a total of 202 trade associations representing millions of Main Street businesses and tens of millions of American workers. It makes clear that, rather than

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2022-07-27T14:21:04+00:00July 12, 2022|

Main Street Gets Squeezed

If the Senate needs more reasons to drop the toxic Build Back Better Act, here’s a good one – job creation on Main Street has been negative over the past four months.  A recent piece in the Wall Street Journal detailed the struggles small employers face in the current job market:

Head counts at companies with fewer than 50 employees declined in three of the past four months, according to ADP payroll data, even as employment at larger firms continued to grow.

We highlighted this divergence several months ago, after the White House conveniently glossed over job losses at small

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2022-06-24T20:35:34+00:00June 24, 2022|