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Ditch the IRA

The Main Street business community today sent a letter to lawmakers with a simple message: many of the proposed tax policies in the Inflation Reduction Act would harm individually and family-owned businesses and should be rejected.

The letter was signed by more than 70 trade associations representing millions of Main Street businesses from every corner of the country and every sector of the economy, including NFIB, the National Restaurant Association, the Associated Builders and Contractors, the National Association of Homebuilders, and others.  It makes clear that the Inflation Reduction Act, which the House is expected to take up

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2022-08-11T18:33:47+00:00August 11, 2022|

“Getting Less for More”

CBS News is out with a great interview that highlights the growing concerns of small business owners as they grapple with rising inflation, worker shortages, supply chain disruptions, and the looming threat of an economic recession.
Here’s how Jessica Johnson-Cope, the owner of a small business that provides security and protection services, summed up the current environment:
With inflation, we’re getting less for more. We have an armored car business, so fuel costs are more expensive. Our largest armored car contract is with the federal government and we forecast those rates out for five years at a time,

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2022-08-05T14:22:52+00:00August 5, 2022|

Recession, Inflation, and the Small Business Sector

Want to understand what’s happening in the economy?  Look to inflation-adjusted data.  Wage levels and company revenues are reported in nominal terms, while the GDP estimates are adjusted for inflation.  That’s why they appear to be headed in different directions when, in fact, it’s all going south.

It’s also the reason inflation is something to be avoided, and something to be addressed quickly when it does appear.  When you dump trillions of new dollars into the economy for a year or two, people and businesses feel wealthier and flush with cash.  They spend more, increase commitments, and hire more workers.

So the

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2022-07-29T18:12:02+00:00July 29, 2022|

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|