As the United States becomes accustomed to a new president after last year’s recent election, many business owners have started wondering how their businesses will be affected with a brand new administration now working within the Oval Office.
President Biden has been a staunch supporter of local and small businesses, citing many ideas and solutions to help small businesses reopen and prosper during and after the devastating effects of COVID-19.
In 2020 alone, over 4 million small businesses closed their doors as a result of the pandemic.
He talked about the matter last month, saying that “it’s not hard to see that we're in the middle of a once-in-several-generations economic crisis with a once-in-several-generations public health crisis. The crises of deep human suffering are in plain sight.”
Listed below are some of President Biden’s new policies that could potentially affect small businesses:
COVID-19 relief bill
President Biden’s administration is currently pushing its $1.9 trillion dollar COVID-19 relief bill through Congress, titled the “American Rescue Plan,” which includes a total of $440 billion for small businesses and communities.
The bill would include flexible grants and low-cost capital designed to help small businesses survive during the pandemic.
The process of how the $440 billion will be distributed still remains unclear at the moment. But 63% of small business owners say they support the bill — despite 46% of them being Republicans.
Sean Nguyen, Director of Internet Advisor spoke on the matter saying, "Small businesses will be fine, and they are likely to receive financial aid in the first half of 2021, as the pandemic will still be impacting us for a while.”
Guaranteed employment relief
Another one of President Biden’s proposals includes the guarantee that businesses with fewer than 50 employees can receive government relief.
His campaign spoke further on the matter saying that they would “provide assistance to help small businesses get that relief quickly, especially minority-owned businesses.”
More benefits for minority-owned businesses include technical assistance, like accounting and legal support, so they are not barred from federal aid programs.
On top of this, unused PPP funds or ones originally set aside for large corporation bailouts will be redirected to help fund small businesses.
Possible higher taxes
Due to President Biden’s big spending plans surrounding healthcare and his environmental and infrastructure initiatives, the likelihood of higher taxes for corporations and high-earning individuals is expected in order to fund the programs.
He has been careful to avoid the tax benefits that affect small businesses, especially the deduction for pass-through companies. But even with this at play, corporate tax could possibly see a 7% increase.
Therefore, if a small business files a C-corporation tax return, their rates will most likely go up.
Raising the minimum wage
While many large companies have already begun the process of paying their employees a higher minimum wage, many small businesses are worried that the wage raise could possibly force them out of business.
President Biden has made it a mission to increase the standard to $15 an hour, more than double the current federal minimum wage of $7.25.
He’s also demanded that tipped minimum wage be put to an end, but there’s currently no plan set in place that explains its possible replacement.
The focus on COVID-19 vaccinations is currently taking priority as President Biden works to help small businesses recover.
Rhett Buttle, the Biden for President National Business Advisor explained, “One in six small businesses are probably not coming back, and COVID is top of mind for most small businesses. The effort to contain the virus and ensure recovery is part of Biden’s small business plan, and small business stakeholders and the focus on small business will be a critical part of that.”
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