ATLANTA – Inflation and rising interest rates are squeezing small businesses in Georgia and across the country, several small business owners from Georgia testified Friday during a congressional field hearing in Peachtree City.
by Dave Williams | Apr 21, 2023 | Capitol Beat News Service
“Costs for everything have increased tremendously,” Lisa Winton, CEO of Winton Machine Co. in Suwanee, told members of the U.S. House Ways and Means Committee.
Winton said her company, which employs 40 workers, saw a 49% increase in sales after Congress passed tax cuts in 2017 sought by then-President Donald Trump, allowing her to hire additional employees. However, changes in tax policy by the Biden administration threaten the company’s profitability, she said.
Specifically, Winton cited limits now being placed on tax deductions for interest paid on business loans and on expensing of capital investments.
“Both of these changes are like a tax on manufacturing growth,” she said.
Matt Livingston of West Point, who owns a restaurant and residential construction business, said inflation is forcing him to raise menu prices, while a workforce shortage has forced him to close the restaurant at times. In some cases, employees failing to show up for work have said they can make more money staying home and collecting unemployment benefits, he said.
Livingston said he used to own four restaurants but had to close three because he couldn’t find enough workers.
“Employees expect higher pay for less work,” he said. “There’s no concept of an honest day’s work for an honest day’s pay.”
Republicans on the committee blamed President Joe Biden for pursuing policies that hurt small businesses.
“If we continue to raise taxes on small businesses and disincentivize people to go to work … small businesses will close,” said Rep. Drew Ferguson, R-West Point.
From the other side of the aisle, Rep. Suzan DelBene, D-Wash., said the Biden administration has helped small businesses by creating manufacturing jobs and has helped their employees by lowering health-care costs and extending the federal child tax credit.
Rachel Shanklin, Georgia director for the advocacy group Small Business Majority, urged Georgia policy makers to enact a state-level earned income tax credit and to expand the state’s Medicaid program, which she said would create 56,000 jobs and insure an additional 500,000 Georgians.
Ah, the ole blaming the worker and government for my underperforming business shtick. If your business cannot survive when you are required to pay your fair share of taxes and a decent wage, then – newsflash – your business is not healthy and the market is telling you that. Many businesses are thriving right now, posting record profits in the last two years.
There should be predictiability in the what the government is doing, that is good for business, but blaming government handouts for not being able to get workers is laughable. The reality is there are so many good paying jobs, folks don’t need to take the lower paying and often harder job anymore. Remember when a good paying job could support a family? Somehow, I know that not a single one of the positions that these business cannot fill will not pay enough to support a family. You can make ~$75k working in a warehouse now, no one needs to take jobs that pay half that, have no benefits and terrible work culture.
I’ve seen multiple restaurants open the last two years as well, while paying ~$12/hr or more. If your restaurants are closing, it’s because they suck. That’s all. It can be hard to look inward and realize maybe you are not the business maverick you thought you are, so why do that, let’s just blame the government!
Spoken like someone who has never run a successful retail business … and hides behind a pseudonym.
I grew up in a small business, have worked in numerous and have the utmost respect for entrepreneurs. I also don’t like cry-baby CEO’s who can’t handle the heat, and go blaming the government. You can claim I’m hiding – but I’m here to voice my opinions and if you have a good argument against it, I’m all ears.
Your new handle needs to be “IgnorantVet101”. Lackeys can make around $16 an hour by staying home and being on welfare / benefits. That’s the number that was published in the AJC about a year ago, by a medium size employer in west Georgia who couldn’t get drivers because he said on average, the people staying home and sucking off the government’s teat are earning about $16 in total compensation when you include the food stamps and unemployment checks. He was offering $20+ an hour at that time – and still wasn’t getting applications because of this. Don’t want to blame the government? Wake up. They’re the ones who created this fiasco in the first place by incentivizing people to stay home and not work. Thank God we live in GA where the governor didn’t lock us down and opened our state up. But the damage is done. The sorry folks who won’t work and expect handouts are never going to come back to the work force – which is exactly how the leftists want them – dependent and afraid to vote for anyone who’s going to incentivize work again.
You have a fundamental misunderstanding of the labor market. My original point stands, people don’t have to work crappy jobs to make a living. Those getting by on government assistance were never in the market to begin with. If your entire argument is that people can make more on welfare than a job, that is not an indictment of the welfare program, but the employers. The federal government adjust rates for most benefits with inflation, where most employers do not. Employers are not paying enough, it is not the other way around.
If you can make more money on government benefits, that means business are not paying enough. I’ve never taken any, besides serving my country, so can’t confirm if what you are saying is true.
Here is a fun experiment: Take a job you held sometime pre-2000. Look up the wage online and see what you would get paid for that same job today, and tell me what the number is. I will be surprised if it comes back less than $20. For fairness, I put in my lowest paid job ($5.15/hr) from ~2007 and adjust for inflation that job would pay $30.49/hr. That same job actual pay for this year? Still under $20.
So, by all means, blame government benefits. However, I would argue that if the minimum wage was pegged to inflation, the number of folks on benefits would be way lower than it is. I still believe it’s non material to the effect on the labor market.
And inflation is tied to how much money the government hands out. The more money the government hands out, the more people are willing to pay to get the things they need and want. If you fix prices, then you end up with empty shelves, and goods for sale on the black market. The senatorial election in GA in 2021 was bought for $2000 per head. Everybody is paying for that now. As you stated your buying power has decreased. What is going to happen next is the job market is going to contract, and as such, competition for Jobs will go up, and labor rates will not increase. During the height of Covid, McDonalds was offering $16/hr. the sign now says up to $12.00, but service has improved. I guess the sit at home money has run out. My grocery bill has increased from $100 per trip to $150 per trip for the same groceries.
Thank you, Brandon, may I have another 4 years!
I’m not sure I follow you? Welfare benefits are not the primary driving factor of inflation. Inflation rises when demand outstrips supply. For sure some things in the COVID relief – and the fiscal policy of trillions of dollars of M2 injection from The Fed to keep businesses from failing completely during shutdown – had an effect, but that does not explain the continued decrease in wages, adjusted for inflation, in the 30 years prior.
Your grocery bill increasing is more related to corporate greed that fiscal policy or government benefits. The supply for most grocery goods was fine. few exceptions for brief periods on some goods. Production costs for most necessary grocery items has not increased, but profits have. That is not a government induced problem.
If the current and former administration took no action to keep the economy running and avoid a worse recession than 2008, you surely would be complaining about how the government did nothing, let hundreds of thousands more Americans die, more businesses close and record high unemployment.
Obviously you have never owned a small business. The government gives handouts to control people, not to help them. You get people dependent on you and they will keep voting for you for life. That is the ONLY goal of Democrats. I am not a fan of Republicans either, but Democrats are way more vicious at the ruining people’s lives so they can stay in power game. Democrats have created multi generational family poverty and non-productive citizens. Democrats want people to be lazy, they do not care how much they are decaying people and families. Then at voting time they say, “vote for us because the other side will take away your food stamps and welfare checks,” and that scares people into always voting for Democrats because they fear having to be productive citizens when they have been non-productive for so long. But there are those out there who have a yearning to get off the taxpayer’s teat and do for themselves but Democrats make is hard as heck for them. Less regulation, less taxes, and less government is what people need. They do not need the government controlling them and keeping them down.
Actually, I have owned and operated an LLC before. It’s tough. I advise many friends who have started their own, and still do to this day, on how to navigate the business world. I’m not a D or an R – so you can skip those angles. Both parties could care less about the working man – it’s the 1% vs. everyone else and the 1% have both parties firmly in their corner.
You have no facts to back-up your claims around “handouts are for control”. If you can find the time to do a bit of research into the boom and bust cycles of the US economy over the last 100 years, you would be surprised to see that without “handouts” there is not propersity like we see today. Our economy has always struck a balance between pure market capitalism and government intervention, sometimes too much or too little, but almost always correcting in time before it’s too late.
It’s not surprising that the partisan legislators blamed the other side for the problems. However, it is instructive that the Small Business Majority advocate asked for Medicaid expansion and earned income tax credits that the Georgia GOP has steadfastly refused to enact. I remember when the Republicans were the party of small business; now, both parties both assist and hinder small business enterprises.
Except minority-owned small businesses….there’s all sorts of incentives to open a business and put it in a woman’s / minority’s / handicapped person’s name……the gov’t and other “woke” companies will pay a premium to send contracts your way.
Medicaid is garbage, as is Obamacare. We need Obamacare to be repealed so that people can have an open market to buy insurance again. I used to be able to buy my own medical insurance and it was affordable and I was happy with it. There is NOTHING affordable about Obamacare and it has only made the healthcare industry and health insurance worse. The ONLY thing that makes products and services better is COMPETITION. Obamacare was the government and big corporations working together to $crew citizens. It should be the government looking out for we the people and making sure the corporations do not scam us in an open and free market. And because Obamacare is tied to a president’s legacy, unless we get people with brains and courage, we are stuck with it forever. We almost got rid of it but John McCain hated President Trump more than he cared about what he told his voters he would do and more than he cared about what was best for our country. Obamacare is awful and ridiculous and needs to be repealed. And not everybody wants to be on Medicaid. We want to be able to afford to buy our own health insurance again. Whether self-employed or employed by a small or large company, many people cannot afford health insurance now because the premiums are way too high. We are supposed to be a FREE nation, why not give an open and free market a chance? And many people now self pay for minor medical visits like many self pay for dental care. Why not bring back the type of insurance like I used to have where I self payed for small stuff but had insurance for major stuff like if I had a heart attack or accident or got cancer. Obamacare took all choice and individual freedom away from citizens. And don’t get me started on how Obamacare hurt part time jobs for people who only wanted to make some extra money or save up for Christmas gifts, etc. Workers used to get all the part time hours they wanted around the holiday season and Obamacare killed that. Obamacare took away some really great things from working class people, not just healthcare.
I agree with Kathleen
Not only are individual choice and cost limited and more expensive. But a 3.8% Obamacare tax on capital gains (sale of land as an example).
Inflation is too high. But the only alternative is recession. Unemployment is at record lows. Jobs at record highs.
Business owners never want to pay taxes. The Trump taxes cuts were the opposite of conservative. Trump caused a 3 trillion deficit. We still have it due to his tax cuts for the wealthy and big business.
Business owners don’t pay taxes, their customers pay these taxes. The end user pays the taxes…99.9% of the time.
Nice point Spyglass
Also, business owner must collect, conform to tax regulation and sometimes pass an audit…at a cost to business…if pass on or not.
Today’s inflation, up from 1.4% when Biden took over, is due to wildly excessive federal government spending.
And Trump’s tax cuts were not the cause of the federal deficit, excessive spending did it. https://www.washingtonexaminer.com/restoring-america/courage-strength-optimism/its-official-trumps-tax-cuts-paid-for-themselves
“The latest Congressional Budget Office report released earlier this month calculated that the federal government collected $4.9 trillion of federal revenue last year. This was up — ready for this? — almost $1.5 trillion since 2017, the year before the tax cuts became law.”
“In other words, revenues were up 40% in five years. The evidence through the first three years of the tax cut finds that the share of taxes paid by the wealthiest 1% rose as well. So much for this being a tax giveaway for the rich.”
Facts will set you free.