The COVID-19 recession has been devastating for countless small businesses. Walk down Main Street in most American cities and you’ll find shuttered stores. And many of the businesses that have survived so far are struggling with withering financials and permanent layoffs.
That’s why the $2.3 trillion American Jobs Plan — proposed by President Joe Biden in March — is so important to the thousands of small businesses we represent. As a source of loans, technical assistance, 100% clean electricity and more, we see the proposal as vital to the full and sustainable recovery of America’s small businesses. Those in Congress who would slash the size and scope of the president’s plan just don’t understand Main Street America.
Small businesses are the lifeblood of our economic activity. They generate nearly half of all economic activity in America and create 64% of new jobs. Additionally, small businesses are far more likely to develop patents and spark innovations than our large-business counterparts — innovations that will be increasingly necessary during a difficult economic recovery and a climate-changed world.
Yet according to the latest U.S. Census Bureau Survey, 69% of small businesses report that the pandemic has had a negative impact on their business. Only half of small businesses have returned to normal levels of operation. Over the course of the pandemic, small business revenues dropped 52% and payrolls declined by 54%. A full 35% of small leisure, hospitality and retail businesses that closed at the beginning of the pandemic remain closed — and a great number of harmed businesses will remain closed permanently.
Small businesses will continue to suffer unless there is a major policy intervention at the federal level. That’s why we’re looking to Congress to pass the American Jobs Plan immediately — and by budget reconciliation if necessary.
The plan will speed up the economic recovery by helping new small businesses get off the ground — and helping existing businesses bounce back. The infrastructure package would invest $31 billion in programs to give small businesses access to credit, venture capital, and research and development funds, with a focus on supporting entrepreneurs in communities of color and underserved communities. It also dedicates $110 billion to technical assistance and financing programs for small businesses and manufacturers. As a complement, the American Families Plan, unveiled separately in April, assists small business employees with quality, affordable child care as well as paid family and medical leave provisions that are vital to working families.
As a “once-in-a-generation investment in America,” the American Jobs Plan is appropriately funded by increasing the corporate tax rate from 21% to 28% and by increasing taxes on wealthy individuals. It does away with unfair loopholes that allow corporations to reduce their tax liability, and it ensures that tax increases on individuals do not apply to anyone making less than $400,000 a year.
According to a report by Moody’s, these changes in the tax code would sufficiently fund the American Jobs Plan without negatively impacting small businesses and their general consumers. If passed, large corporations will finally have to pay their fair share of taxes, and small businesses will finally be allowed some breathing room to grow and flourish. The American Jobs Plan would move us away from a paradigm of supporting large corporations above all else — and toward one of helping the businesses that need the help most.
Thankfully, we are not alone in this view. When polled, 73% of voters and 80% of small business owners support the American Jobs Plan. More specifically, 67% of small business owners support the proposed changes to the tax code, 76% believe the American Jobs Plan will boost the economy, and 72% agree it will help small businesses in particular.
As challenges loom for our economy and our climate, Congress must take action. The American Jobs Plan is popular, necessary and a life line for Main Street as we emerge from the long, hard knocks of COVID-19.
Stephen Michael (email@example.com) is the co-executive director of Main Street Alliance, a small business advocacy organization. Thomas Oppel (firstname.lastname@example.org) is executive vice president for the American Sustainable Business Council.