Want to know how to undermine small businesses like mine? Vote for trillions of dollars of more tax breaks for your wealthy out-of-state donors while hurting the communities and the customers on whom we depend.
I own and run Lubec Brewing Company in Lubec, where I employ six people. As a small-business owner, you might think that I would be happy that on Sept. 28 my representative, Bruce Poliquin, voted for legislation called the Protecting Family and Small Business Tax Cuts Act of 2018 ( HR 6760). (It now awaits a vote in the Senate.) However, despite its name, the bill threatens small businesses like mine while enriching Poliquin’s donors.
The “small business” part of the new bill’s title refers to a 20 percent deduction that certain types of businesses can deduct from their income before figuring their taxes. This deduction was passed as part of last year’s tax bill, but the new bill would make it permanent. Even though the bill’s authors claim this provision is aimed at Main Street, its real benefactors are more frequently found on Wall Street.
The nonpartisan Joint Committee on Taxation estimates that, by 2024, 61 percent of the tax benefits from this “pass-through” business income tax cut will go the wealthiest 1 percent of business owners, while just 4 percent will go to the bottom two-thirds. That’s because pass-through business income is highly concentrated in the hands of just a few tycoons — people like Donald Trump, for instance, whose business empire consists of 500 such businesses.
Along with huge “small businesses,” huge corporations were the big winners from last year’s tax bill. They got hundreds of billions of dollars in tax cuts, but instead of sharing the wealth with workers or investing in local communities — as we were promised they would — they’re directing their tax savings into the pockets of CEOs and wealthy shareholders.
American corporations are on track to announce record amounts of stock buybacks this year — nearly $750 billion worth has been authorized since the tax law was enacted. Stock buybacks artificially inflate stock prices, further enriching shareholders and leading to bigger pay packages for CEOs.
Proponents promised that last year’s tax cut would “pay for itself” through greater economic growth. The sad fact is it will instead balloon the national debt by $1.9 trillion within a decade. The new round of tax cuts the GOP Congress just voted for will dig us even deeper into debt, to the tune of at least $3 trillion over the next 20 years, including $132 million for the top 1 percent of earners in Maine.
So what does this new tax bill mean for small businesses like mine? It makes it harder for us to compete with the large corporations and out-of-state chains receiving massive tax breaks. It means a disinvestment in our communities and in our customer base. It will cause even deeper cuts already proposed by Republicans to Medicare, Medicaid, education, food and rental assistance, giving consumers less money to spend at local businesses for groceries, haircuts, dining out and, yes, beer.
What could we do with the $132 million that Poliquin just voted to give to his wealthy donors? We could instead give each of Maine’s 15,105 teachers a $8,706 raise or fund universal home care for 27,000 seniors and people with disabilities. Those teachers and home care workers could then spend that money at local businesses like mine instead of hiding it away in offshore tax havens and vacation homes in other states.We could repair the roads and bridges on which businesses like mine depend. We could fund food assistance for more than 80,000 people in a state where roughly 1 out of every 6 people experience food insecurity.
So why would Poliquin vote to give tax breaks to the uber rich at the cost of working Mainers in the 2nd District? Follow the money. As of Sept. 30, Poliquin’s re-election campaign had received over $1.9 million from political action committees, as well as big chunks from the investment banking industry he was once part of and that gained big-time from GOP tax cutting. Meanwhile, just 1.1 percent of his campaign donations were from small donors giving less than $200.
I’m disappointed that Poliquin has once again decided to side with his wealthy donors instead of with real Maine small-business owners.
Gale White is owner of Lubec Brewing Company.
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