As we look back on 2021, we wanted to highlight some of the important measures taken to advocate for Michigan small businesses.
1. Safely Reopen Michigan
We were crucial in advocating to safely reopen Michigan business. As the pandemic continued into 2021, too many small businesses were still at risk of permanent closure due directly to state government actions. Plus, the recent vetoes of important and vital help for small businesses sent a message that the state did not take into account small businesses and our survival.
- Allow indoor foodservice to safely return in bars restaurants, theaters, bowling alleys, convention centers, etc.
- Defer property tax payments without interest or penalties for all industries required to be closed or substantially limited in the fall or winter.
- Do not charge small businesses for the use of the unemployment system as an expanded social safety net when we were forced to be closed by government actions.
2. $15 Minimum Wage
Almost 900 people responded to our Call-to-Action (CTA) opposing the federal minimum wage increase to $15 an hour. This bill would have caused price inflation, higher deficits and 1.4 million lost jobs. With more and more small businesses closing their doors each day due to the impact of COVID-19, increasing the minimum wage would have been especially devastating to small businesses.
We are thrilled to say this bill was not passed. Please note, Michigan’s current law already substantially exceeds the federal minimum wage and automatically increases each year, including the changes that will occur January 1, 2022.
3. MIOSHA Permanent Rules
In May of 2021, we put out a CTA that opposed MIOSHA’s proposed permanent COVID-19 workplace rules. While it made sense to have the rules during the height of the pandemic, Michigan job creators and small business owners are the ones that should be trusted to follow CDC guidelines and common sense without overly burdensome and inconsistently applied rules from MIOSHA. These rules would have made Michigan businesses uncompetitive on a global scale.
Over 1,700 people responded to this CTA and we are happy to say that it did not pass.
4. Biden Financial Reporting Requirement
In September of 2021, the Biden Administration proposed to require banks to report detailed information on customer account inflows and outflows to the IRS. It was an intrusive and unreasonable invasion of privacy, and it would have created unnecessary and expensive burdens for banks and raised the cost of tax preparation for small businesses.
This proposal was rejected thanks to over 1,300 responses to this CTA.
5. Biden’s Build Back Better Spending Plan
Most recently, SBAM advocated against the President’s proposed spending plan. This plan would have been an unprecedented level of ongoing government spending as the effects would have raised inflation and it included a myriad of anti-small business tax increases, including:
- IRS Privacy Invasion: The house of cards being built to support this record-high spending level includes squeezing nearly a half trillion dollars more out of taxpayers by reporting virtually all transactions into and out of personal and business bank accounts. This unprecedented invasion of privacy will violate constitutional 4th amendment protections, require extraordinary amounts of unproductive administrative costs, and create untenable cybersecurity risks.
- Death Tax: The proposal to tax the inheritance of a business by more than 40% of the value. Businesses do not have that kind of cash on hand. The value of a business is not sitting in a bank account. It is in the blood, sweat and tears it took to build the business. The President’s spending plan would have caused countless small businesses to liquidate or sell to private equity firms to pay the taxes, resulting in fewer locally owned small businesses.
- Higher Taxes: It is easy to pick a number and call it rich, but most small businesses are organized as pass through entities, paying their business taxes on their personal tax return. That pass through personal income does not usually equate to actual cash compensation to the owner of the business. Most businesses reinvest in their businesses, sacrificing now to building something better for the future. By increasing the tax rates on pass-through income, it would have reduced the capital available to invest in the growth of the business.
6. Small Business Support
While large economic development deals dominated the end of 2021, the Legislature also passed substantial small business support. Throughout the pandemic, the Legislature sent several pro-business bills to the Governor but they were vetoed. Luckily, our persistence on these issues that matter to small business’s bottom line paid off and Legislators proposed a package of bills that sought to bring relief to our small businesses most affected by the state’s pandemic response. Those proposals were passed along with an increase in the small business personal property tax exemption. Additionally, legislation that would allow for pass throughs to pay taxes at the entity level and fully deduct their state and local taxes from their federal tax bill passed, presenting an opportunity for our small businesses to save on their tax bill. Our continual advocacy, and our dedication to do so in a bi-partisan way, brought forth a solution that supports our small businesses.
As we head into 2022, our priorities will continue to lift up what matters most to our small businesses:
A talented workforce
In a tight labor market, we’ll continue to advocate for proven programs to boost our employees’ skills to meet demands and think of innovative ways to increase our labor participation rate. Whether it’s supporting the Michigan Reconnect Program or advocating for more funding for Going Pro, we’ll ensure our policies align with getting more people off the sidelines and into the workforce.
A safe workplace
In 2022, we will advocate for continued business clarity and consistency when it comes to COVID-19. We will promote vaccines as safe tools to keep our doors open and look to strike down government mandates that seek to dictate employment requirements.
An ease of doing business
Whether that’s ensuring our regulatory environment promotes business growth, taxes are fair and consistent, or our economic development incentives are competitive, we seek to make Michigan the top state to operate a small business.
For more information on our work, contact Alexa Kramer, Director of Government Operations, at alexa.kramer@sbam.org.