During Tuesday night’s presidential debate, Vice President Kamala Harris repeatedly claimed she would “help small businesses.” But the economic data, the details of Harris’ “plan,” and the actual results of the Biden-Harris policies over the past four years indicate that a Harris presidency would produce more of the same dismal results for small business owners and employees.
Currently, just under half of all Americans are employed by small businesses, defined as those with fewer than 500 employees. About 27% of Americans work for companies with fewer than 50 employees.
According to the latest National Federation of Independent Business (NFIB) survey, small business optimism fell 2.5 points in August, the steepest drop since June 2022. The overall reading fell throughout the Biden-Harris administration, hitting 11 points . -minimum of the year in March of this year.
“Owners remain pessimistic about future business conditions,” said NFIB Chief Economist Bill Dunkelberg. Most owners have “weak expectations of business conditions six months from now,” while only six percent think it’s time to invest. “Capital spending is historically low,” he added.
In the most recent survey, small business owners named the cost of health insurance as their most pressing issue. From 2020 to 2023, employer-sponsored health insurance premiums increased by approximately 22%, placing an enormous burden on both small businesses and their workers. Americans who work at businesses with fewer than 200 employees contribute more for family coverage than those at larger firms, paying an average of 38 percent of the premium, compared to 25 percent at large firms.
Along with general inflation, the so-called “American Bailout” also directly caused these premium increases by expanding Obamacare subsidies and shifting those costs to small business owners.
Most business owners in the NFIB survey said other issues, such as “uncertainty about economic conditions” and “uncertainty about government action,” especially when it comes to energy regulations and prices, are also taking a toll on optimism.
According to a report released in May from the House Committee on Small Business, regulations imposed by the Biden-Harris administration cost small businesses a total of $1.7 trillion, including 312 million hours spent on compliance. In a letter to Congress signed by 50 trade groups, small business leaders pointed to at least 28 cases where federal agencies “failed to adequately examine the economic costs of regulations.” The letter went on to call the number of regulations “unprecedented,” saying they place a “disproportionate” burden on small businesses.
Rising energy costs resulting from the Biden-Harris administration’s war on American oil and gas production are also hitting small businesses hard. American commercial and industrial companies faced a $41.4 billion increase in energy costs in 2022 alone. As businesses face higher costs to keep the lights on and transport their goods, they are forced to make cuts elsewhere, including in the workforce, to stay afloat.
“Energy is one of the most important cost drivers for businesses, along with real estate prices to rent or buy and labor costs,” said Joachim von Dieffenbach, a retired economics professor who has advised three governments and lectured at universities in Austria, Germany. and Switzerland. “All of these factors have been made unpredictable by an energy policy that prioritizes clean energy while limiting or neglecting more cost-effective options.”
The declining value of the US dollar is another threat to small businesses, especially those that rely on imported goods or materials, engage in international trade, or have energy-intensive operations. A weaker dollar makes imports more expensive because businesses have to pay more for goods and raw materials from other countries. Small businesses often lack the bargaining power of larger firms to absorb or pass these costs on to customers, squeezing already thin profit margins. Because energy is often priced in US dollars on global markets, a weaker dollar can further increase energy costs.
Harris’s policy proposals — to the extent that she has released any concrete plans — offer little reason to believe that things would improve if she were in the Oval Office.
Harris has said, for example, that he would eliminate former President Donald Trump’s tax cuts, which he voted against in the Senate. Under the Tax Cuts and Jobs Act of 2017, business owners can deduct up to 20% of qualified expenses – meaning significant tax savings for small businesses. Harris pledged to let new business owners deduct $50,000 in expenses, up from the current $5,000, but that will do nothing for small business owners who may be able to pay tens of thousands of dollars more to the IRS.
Harris’ plan to institute higher income taxes, higher business taxes, higher investment taxes and a tax on unrealized capital gains would also be disastrous for businesses large and small.
Perhaps worst of all, Harris’ spending plans — which economists believe would cost at least $1.7 trillion — would likely see a return to the 40-year-old inflation that has plagued much of the country of the Biden-Harris administration. For companies still struggling to adjust to 20% cumulative inflation over the past four years, another round of steep price hikes would be devastating.
Since Biden and Harris took office, small businesses have been in an era of pronounced decline. Giving Harris a promotion would likely result in more of the same, if not worse, results.
Ben Solis is the pen name of a journalist, historian and international affairs researcher.
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