By Christian M. Wade
Gloucester Daily Times, Mass.
(TNS)
BOSTON — Main Street employers are getting hammered by taxes, health care expenses, lingering high inflation and other costs, according to a new report by a national business group, which calls on Beacon Hill policymakers to focus their attention on helping small businesses stay afloat.
The report by the National Federation of Independent Business found that despite the 2018 Tax Cuts and Jobs Act, which reduced the corporate tax rate from 35% to 21%, a quarter of small business owners still view federal taxes a “critical” problem. That’s an increase of five percentage points from four years ago, according to the report.
The potential expiration of the Small Business Deduction at the end of 2025 could exacerbate this issue, leading to a significant tax hike for about 90% of small businesses, the report’s authors noted.
“Small businesses employ nearly half of the private sector workforce, and this publication makes clear where lawmakers should focus their attention to strengthen Main Street and every community in which they operate,” said Holly Wade, executive director of NFIB’s Research Center.
“Despite the headwinds and economic challenges, small business owners are working hard to create new jobs and grow their businesses, but the threat of rising costs, taxes, and uncertainty gives Main Street pause,” she added.
The report, which was based on survey responses from nearly 2,900 small business owners, listed health care insurance costs as the top concern, with 41% of small business owners calling it a critical issue. Inflation, the cost of supplies and inventory, energy, and “uncertainty” over economic conditions and government actions, were also top 10 concerns.
Chris Carlozzi, executive director of NFIB’s Massachusetts chapter, said the survey results are a “great representation of how Massachusetts small business owners feel” and said inflation and other rising costs are “causing concern for the future of their businesses.”
“Small businesses throughout the Commonwealth continue to rank the rising costs of health care, excessive taxes, and steep energy costs as the top issues facing Main Street,” he said. “However, new issues like credit card swipe fees have entered the fray which is especially troubling for Massachusetts businesses that are included in the handful of states prohibited from passing that expense to consumers.”
The high cost of insurance remains a top concern for Massachusetts employers, the survey found, with the state Division of Insurance reviewing proposals from large commercial insurers to increase premium rates by an average of 8.4% next year for merged group health plans offered to businesses with 50 or fewer employees.
The insurance rate hikes, if approved by regulators, would far exceed the 3.6% benchmark for health care costs set by the Massachusetts Health Policy Commission, an agency that tracks health care spending.
Business leaders say the higher rates would add to mounting financial pressure on private employers that already includes rising labor and energy costs, as well as a paid family and sick leave law.
“We urge elected officials to hear the concerns of small businesses and work on providing them economic relief,” Carlozzi added.
Gov. Maura Healey, a first term Democrat, has focused on improving the state’s business climate as part of a broader effort to reduce the state’s cost of living and improve its competitiveness.
Last year, she signed a bill that promises to reduce the burden for taxpayers and companies through a slew of credits and other measures, including eliminating the tax for estates under $2 million.
But Healey and other Beacon Hill leaders have also faced criticism over support for the millionaires’ tax, a voter-approved law setting a 4% surtax on incomes over $1 million, and other proposals that business groups say will increase costs for employers.
The Legislature has been criticized for failing to advance an economic development bill that was being considered by House and Senate negotiators before the July 31 end of formal sessions, when lawmakers recessed to campaign for reelection.
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(c)2024 the Gloucester Daily Times (Gloucester, Mass.). Visit the Gloucester Daily Times (Gloucester, Mass.) at www.gloucestertimes.com. Distributed by Tribune Content Agency LLC.
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Tags: Benefits, Human Resources, Payroll, Small Business, Taxes
