MINNEAPOLIS (April 17, 2017) — Small business owners on Monday brought concerns about state and federal tax and budget trends to elected officials.
U.S. Rep. Keith Ellison (DFL-5) and Minn. State Rep. Erin Murphy (DFL-64A) met with 15 small business owners at Pizza Nea on Monday. The two heard concerns about investment in communities over tax cuts that disproportionately benefit multinational corporations to boost economic growth. The current tax reform plans include deeper cuts for big corporations without any benefits for Main Street and other average taxpayers.
According to Ellison, President Donald Trump’s proposal maintains deferral, the biggest offshore loophole, and gives multinational corporations with profits stashed overseas an undeserved tax break of more than $550 billion. Trump’s plan also slashes corporate tax rates from 35 percent to 15 percent, losing $2.6 trillion in tax revenue over 10 years, he said.
Ellison also said that the House GOP trotted out a new lower rate for “pass-throughs” as a way to benefit small businesses, but most small business owners wouldn’t see a dime. Pass-through income is highly concentrated among the top 1 percent of households, or those with incomes above $639,500 in 2016. President Trump, who is the principal owner in approximately 500 pass-throughs, better exemplifies the type of business owner who would benefit from this type of tax cut, he said.
Danny Schwartzman, owner of Common Roots Cafe and Catering, said the Trump tax proposal is bad for the community and bad for small business.
“Large corporations with giant profits and the wealthiest Americans shouldn’t see huge tax cuts, while our local communities suffer,”Schwartzman said. “We need lawmakers in Washington, and right here in Minnesota, to close the loopholes that help large companies avoid paying their fair share, so that we can invest in our communities.”
Mike Calawerts, owner of Orangetheory Fitness in Uptown and Edina, said the strength of his business relies on the health of his employees.
“I pay my fair share of taxes, and I know that my tax dollars support critical government investments and services that my business, my community and my employees rely on,” Calawerts said.
Business owners also talked about the Minnesota Budget targets at the meeting. The state House of Representative allocated $1.8 billion for tax cuts in 2018-19, and $599 million in cuts to Health and Human Services, Murphy said.
“For a small business to thrive, the community that surrounds it must also,” Murphy said. “A healthy, thriving community is one in which its residents are making ends meet for themselves and their family, where their kids have access to a high-quality education, and everyone has health care they can count on. This takes an all hands on deck approach, where everyone plays their part. When Minnesotans and their communities thrive, then so do our small businesses. Our politics and our policies should support that.”
Holly Hatch- Surisook, owner of Sen Yai Sen Lek, said those types of tax cuts are alarming.
“They reduce local revenue, and potentially gut important programs that keep my community and customers prosperous,” Hatch- Surisook said. “Ultimately, this type of tax reform hurts small businesses.”
Todd Mikkelson, owner of Sprayrack in Orono, said the state tax bill sends tax money out of the state benefiting owners of large corporations who don’t live in Minnesota, and is no benefit to small business owners who live here.
“The surplus provides us the revenues needed to fix things we’ve been neglecting for decades,” Mikkelson said. “Fixing infrastructure so we can deliver our goods affordably, passing a transportation bill so our employees and customers have better access to us – these are things that would help small business owners.”
