On Tax Day last year, my middle class family owed $7,000. The tax laws set by the previous administration weren’t helping small business owners like me. This year, we got a $1,900 refund. That’s directly thanks to the extended child tax credits in the Biden administration’s American Rescue Plan.
As a small business owner, I typically dread tax season. But I know that paying my taxes goes directly towards benefitting my local community. My tax dollars fund schools our future workforce attend, public transportation that brings people to work, and parks that attract tourists. When my community thrives, so does my business.
But it really bothers me when small business owners like me have an average tax rate of 13%, while corporations such as FedEx and Nike have yet to pay any net federal income taxes since the Trump administration’s tax law. While small businesses bore the brunt of the pandemic’s recession, Amazon benefited the most from this pandemic bringing in $44 billion in profits, yet it only paid 4.3% in taxes.
In virtually every category, large corporations carry an advantage over small businesses. They can afford to provide generous benefits to their employees like quality health care, unlimited paid time-off and on-site daycares. When I’m hiring, there’s no way I can afford to compete with that.
When I’ve tried to get health care plans, there are so many regulations that feel like a lobbyist for big business wrote them. Wealthy corporations can pay expensive accountants to evade taxes and take advantage of programs and loopholes designed for small businesses. It really feels like the system is built against businesses like mine.
So after learning about President Joe Biden’s plan to close tax loopholes and make large corporations pay their fair share in taxes, I was excited for the benefits it brings to my business and community. The corporate profits tax would raise roughly $320 billion over 10 years to fund critical investments like extending affordable health care plans and capping child care costs. This brings down costs for everyday Americans and small businesses.
The pandemic revealed that without childcare, the whole system crashes. If I got an applicant with a small child and they had guaranteed child care and could come to work knowing their child is taken care of — if providing that means a corporation needs to pay more — I don’t have a problem with that. In fact, it would help me too as I currently spend $1,200 a month for child care for my 3-year-old twins.
The plan also funds universal preschool. To me, it’s one of those things your taxes should pay for. Access to pre-K has a long term impact in reducing crime and increasing graduation rates. It’s an investment in the community for long-term prosperity.
We tend to pick on wealthy corporations and billionaires. Some of it is warranted and some isn’t. But when people complain that increasing corporate taxes will hurt small businesses, it doesn’t sit right with me because it simply isn’t true. Corporate taxes are paid almost exclusively by the rich, because America’s wealthiest 1% own over half of corporate stock while 80% of corporate taxes fall on shareholders. Any amount that falls to employees is disproportionately on the highest-paid executives, not the rank-and-file workers.
In my previous job with a large financial institution, the CEOs salary was $21 million before bonuses. I remember thinking the CEO doesn’t need to make that much especially as they began laying off thousands at the start of the pandemic.
After a pandemic where wealthy Americans and corporations increased their net worth while everyday Americans saw their livelihoods at risk, legislation to even the playing field is long overdue. Working-and middle-class Americans are the lifeblood of this country that keeps the economy running. If we want to make this country better for the next generation, we must hold corporations accountable and pass Biden’s economic plan.
Christian Strange lives in Norfolk with his husband and twin boys.