Three small business-friendly policies to help cut expenses and cope with inflation 

While there has been a lot of positive news about our growing economy lately, inflation has caught our attention. Unfortunately for the Main Street mom-and-pop companies, many elected leaders are choosing to use this as a cudgel to bludgeon their opponents rather than putting in the hard work of helping small business owners and their employees cope.

In 2021, the US economy saw its largest annual growth since 1984. The most current job report shows that the streak of strong gains continues. And there is one boom among Americans interested in starting new small businesses. But a new Small Business for America’s Future (SBAF) survey of 1,576 small business owners conducted this month shows that Main Street entrepreneurs say inflation is their biggest challenge. For Main Street, this is the latest in a series of challenges unleashed by the COVID-19 pandemic. The difference is how many of our leaders respond.

When the pandemic first broke out two years ago this month, we saw remarkable bipartisan support for programs designed to help small businesses and their workers through the crisis. Now we see stagnation. In fact, many politicians are quick to blame the bipartisan federal aid programs they support, even as the stimulus and paycheck protection programs saved thousands of small businesses and millions of jobs and created today’s burgeoning economy.

What we hear little about or see action against are the other causes of inflation that have not benefited the country. Chief among these are the large companies, which have been quick to raise prices while posting record profit margins. The Wall Street Journal reports that nearly 100 of the largest publicly traded companies in the U.S. reported 2021 profit margins that were at least 50 percent higher than their 2019 margins. Overall, net profit margins for large companies hit record highs in 2021. And, of course, the invasion of Ukraine led to an increase in gas prices, but long before that Wladimir PutinVladimir Vladimirovich Putin, a Russian journalist, explains why she staged an anti-war protest on live TV rolled tanks to the border, the four big oil companies had taken your extra dollars at the pump and used them on them Record level of share buybacks. We don’t need to guess what’s behind these business decisions—CEOs and CFOs at large companies have said it openly win calls.

All of this is clear to small business owners, with 63 percent of respondents in SBAF’s March survey saying they think big companies have taken advantage of inflation to unnecessarily raise prices for customers and boost profits.

To deal with the effects of inflation and corporate greed, small businesses and their employees need solutions that reduce costs that eat away at their bottom line and help expand the workforce. Here are three things Congress can do:

First, lower prescription drug prices. Average drug prices 2.56 times higher in the US than in other countries – a huge expense that contributes to inflation. One in three Small business owners have increased the prices of their goods and services to offset employee healthcare costs. No wonder the March SBAF survey shows that 80 percent of small businesses strongly support reforms to reduce health care and prescription drug costs.

Second, reduce child care costs. Fifty-five percent of small businesses support expanding the child tax credit, which puts money in the pockets of working families, and capping families’ childcare costs. the Job Report January contained an amazing metric: Over 1 million men joined the workforce, compared to just 39,000 women. Women are excluded from the workforce due to the lack of affordable and accessible childcare. More women in the workforce will improve companies’ ability to offer goods and services, and thus moderate inflation.

Third, Congress should be temporary expose the federal gas tax and pay for it by greatly increasing ours low Corporate tax rate by 1-2 percent. This would ensure that large businesses that routinely edit tax legislation to pay little or no federal tax pay their fair share (about 65 percent of small business owners support in our March poll) and give small business owners and ordinary Americans a break from higher energy bills .

Taken together, these measures would ease the pressure that inflation is putting on the wallets of small business owners and their workers. We recognize that many politicians do not want to solve this problem because, with the midterm elections approaching, the economic struggles of working Americans can serve their political interests. But a better policy strategy would be to take the above actions, which are widely held.

To maximize our economic recovery, we must seize opportunities to enact policies that help our small businesses, which create two-thirds of all new jobs and employ half of all workers, thrive. With the right policies, America’s small businesses will thrive and our economy will prosper.

Anne Zimmerman is Co-Chair of Small Business for America’s Future and Founder and Owner of Zimmerman & Co CPAs, a public accounting firm with offices in Cincinnati and Cleveland, Ohio.

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