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SMALL BUSINESS ADVISORY ALERT: Re: Build Back Better Act [BBBA]

**From the Desk of Susan Terzakis**

Small businesses are managing some significant challenges right now, including:
labor shortages, rising inflation, supply chain disruptions, and COVID-19 variants.

As a trusted small business advisor, I would be remiss if I didn’t go on the record with my thoughts on the BBBA awaiting members of the US Senate.

_I do not believe this is the time for Congress to impose significant tax increases, inflexible mandates, or massive new civil monetary penalties on (micro) small businesses._

The **micro-small business economy is so frail right now** and trust me when I share this with you: far too many simply cannot absorb these substantial fines and the cost of doing business increases!!

**When will lawmakers understand that a healthy small business community IS a healthy community at large!?!**

The BBBA 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 (individual filers) and $500,000 (joint filers).
[[Source NFIB press release (11/19)](https://www.nfib.com/content/press-release/homepage/nfib-houses-build-back-better-act-would-harm-small-business-recovery/]

For a small business owner, this is a very big deal.

These taxes will divert resources away from… job creation, compensation increases,
business investment, and further complicate tax compliance.

Moreover, this proposed bill would create a 4-week federal paid family and medical leave program for ALL workers. This would be a considerable change for small employers who are currently not subject to the Family and Medical Leave Act ([FMLA]([https://www.dol.gov/agencies/whd/fmla])).

As if all this wasn’t enough, there is this to consider:
BBBA increases civil monetary penalties on small businesses for errors related to federal employment law compliance. It increases penalty exposure for employers by expanding the Affordable Care Act’s employer mandate. Additionally, there is a strict liability standard for Fair Labor Standard Act (FLSA) violations.
[Source: Build Back Better Act ([H.R. 5376](https://www.congress.gov/bill/117th-congress/house-bill/5376)).]

I’m alllllllllll for “good business” but sincerely, this is just too heavy-handed, even by Washington standards!

These micro-small businesses are fighting to stay alive and now Washington wants to put more burdens upon them?

**This is so counterproductive – and as such, we should take a stand and let them know that this is not what infrastructure spending should be about.**

As reported by NFIB on 11/17, the Infrastructure Spending Law and Build Back Better Act Bill Timelines and Policies…

“_Participation in a federal paid family and medical leave (FMLA) program would take away the flexibility many small businesses need and, in some cases, require, to be able to manage their workforce at a time when half of small business owners are struggling to fill open (and well paid) positions right now!”_

As a Small Business Advisor, I say yes, of course our roads and bridges, airports, truck terminals, and ports all need to be addressed – **so let’s do just that!**

**Why impose all this on the backs of small businesses in our communities?**

I’ve often been asked at what point is enough… well, I’m calling it out now – we’ve certainly reached the point where we should say, as one: **enough is enough.**

**Small businesses are made up of our neighbors, our friends, and yes, even our families. They’ve committed to you and your family’s betterment.**

So would you **please** consider supporting them back in kind by simply asking your Senator to push back and demand a clean bill that truly builds America’s infrastructure back better with better roads, bridges, ports, telecommunications, broadband, clean energy, clean water, and airports.

To be sure, **this** will help local small businesses, regional mid-size businesses and national corporate businesses, alike! **We welcome a true win-win-win like this.**

You **CAN** and **SHOULD** make a difference.

So, here is how you can help now…right now.

Here are two links to help you identify your Senator and Representative in Washington, D.C.:

1. [Find Your Representative](https://www.house.gov/representatives/find-your-representative)
2. [Find Your Senator](https://www.senate.gov/)

**Don’t let the cynics win by having you believe your vote and voice don’t matter –
because they do!**

**Please** urge your Senators, you have two of them, to oppose these anti-small business proposals.

**Here is your call to action:**

Compose Your Message as follows:

**Subject Line:**
Please Oppose the Small Business Surtax and Massive New Small Business Labor Fines

**Message Body:**
Dear Senator______________________,

Recently, the House passed the Build Back Better Act that proposes saddling small businesses with significant tax increases, inflexible mandates, and unaffordable penalties. I ask you to continue to oppose new small business tax increases that were included in the House bill. The following provisions are of concern to me:

**Small Business Surtax** – The bill would expand the ACA’s Net Investment Income Tax (NIIT), which currently applies only to situations where someone earns passive income, to also apply to income from active business operations where the owner runs the business. Under the bill, if a small business owner has business income above $400,000 ($500,000 joint return), the small business surtax of 3.8% will now apply. Worse, the provision isn’t indexed to inflation. Thus, the small business surtax will continue to ensnare a larger number of small business owners and a larger share of small business income each year. I ask that you please oppose the Small Business Surtax.

**Federal Paid Family and Medical Leave Program** – The bill creates a four-week federal paid family and medical leave program beginning in 2024. This inflexible program only requires employees to self-attest that they provided seven days notice to take up to four weeks of leave. Half of small business owners cannot fill open positions. This program could exacerbate the workforce shortage.

**Massive New Small Business Labor Fines** – The bill continues to massively increase fines under multiple statutes administered by the Department of Labor. Maximum minimum wage and overtime violation fines are increased from $1,100 to $20,740 per violation, and the maximum tipped credit violation is increased from $1,100 to $11,620. These fines are typically assessed on a per-employee basis. As a small business owner, I cannot afford the lawyers that big businesses use to fight these fines. If FLSA and other labor fines are going to increase, fines should be tiered based upon the size of the employer.

**I urge you to please oppose these anti-small business provisions in the Build Back Better Act.**

If the legislation remains anti-small business, I urge you to stand the line and vote no.

Source: [NFIB](https://www.nfib.com/advocacy/now/?vvsrc=%2fcampaigns%2f89281%2frespond%3fmkt_tok%3dNDgzLVNZTS0wNDkAAAGAi6bViMYecBAuF5iSyuJYUSaKBalCHc15PGOjo8KzfsbfsbBv1AD-6Gf2P7DG4Dyv1LwqelHdojwqWEM58IU])

**List of Resources:**

[Build Back Better Act](https://www.congress.gov/bill/117th-congress/house-bill/5376) (H.R. 5376) as a key vote for the 117th Congress.
[Congressional Budget Office](https://www.cbo.gov/publication/57627)
[US Senate](https://www.senate.gov/legislative/bills_acts_laws.htm)
[BallotPedia](https://ballotpedia.org/Build_Back_Better_Act)

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