(The Center Square) – Kansas businesses would be worse off if the Biden administration's Build Back Better plan is passed, according to a small business advocacy group.
Dan Murray, Kansas state director of National Federation of Independent Business, told The Center Square that small businesses are managing many challenges right now including labor shortages, rising inflation, supply chain disruptions and the COVID-19 delta variant.
Murray said lawmakers should focus on providing solutions to those problems.
"It is not the time for Congress to impose significant tax increases, inflexible mandates and massive new civil monetary penalties on small businesses," Murray said. "The small business economy is fragile, and they simply cannot absorb these substantial fines and cost increases."
Several features of the plan, which is being debated in the U.S. House of Representatives, would be detrimental to Kansas businesses, according to Murray.
"The Build Back Better plan would be a disaster for Kansas small businesses and threaten the fragile small business recovery," he said. "The legislation would increase taxes, impose new mandates and increase penalties on small business owners."
By expanding existing passive income and applying them to active income, a true “Small Business Surtax" is created, he explained. The legislation expands the 3.8% net investment income tax (NIIT) on pass-through business income and applies it to all business income above $400,000 for individual filers and $500,000 for joint filers.
According to Murray, the legislation also creates a four-week federal paid family and medical leave program for all workers without regard to employer size, dealing a major blow to small employers who are currently not subject to the Family and Medical Leave Act (FMLA), taking away the flexibility many small businesses need to be able to manage their workforce.
"The Build Back Better Act increases civil monetary penalties on small businesses with isolated errors when trying to comply with complicated federal employment law and increases penalty exposure for employers by expanding the Affordable Care Act’s employer mandate," Murray said. "There is a strict liability standard for Fair Labor Standard Act (FLSA) violations, meaning employers who make an honest misinterpretation of the law or make an isolated mistake are not given leniency."