Capital gains tax increases would harm small businesses
FOR IMMEDIATE RELEASE
Small Business Investor Alliance
Capital gains tax increases would harm small businesses and hamper job creation
WASHINGTON, DC (April 28, 2021) – The Small Business Investor Alliance (SBIA), the association for private equity funds investing in American small businesses, was disheartened to see that the Biden Administration’s latest tax proposal includes massive tax increases on small business investment via the doubling of the long-term capital gains rate. A significant increase to capital gains rates will reduce long-term investment, discourage entrepreneurship, and create perverse economic incentives for short-term thinking and quick flip investing.
“Increasing taxes on small business investing is the exact opposite of “Building Back Better” because it impedes building and growing small businesses,” said SBIA President Brett Palmer. “To create American jobs, to expand economic opportunity, to rebuild a domestic manufacturing base, to compete with China, and to solve our societal and environmental challenges – we need long-term, patient investment in America’s problem solvers and job creators. The tax increases on long-term capital gains – on small business owners, their families and their investors – would be the exact opposite of what we need to re-energize our economy and to expand upward mobility. We urge the Administration and Congress to throw out these tax increases on long-term capital gains and instead support job creating policies that encourage new small businesses to open their doors, that empower small businesses to grow and hire, and that include all Americans in the prosperity of free enterprise. Doubling the capital gains rate hurts Main Street way more than it hurts the corporations traded on Wall Street.”
Small business owners and their investors commit years, and oftentimes decades, of their lives and resources working to grow small businesses. When a small business is sold, it is often over the $1 million dollar threshold for being “rich”, and therefore taxed at a higher rate. The tax increases President Biden is proposing ignore that these small business owners only get to sell their life’s work once, and it often represents the bulk of their retirement savings. Doubling the capital gains tax on small business investment is the type of shortsighted, soundbite-driven policy that harkens back to the stagflationary policies of the 1970s.
Small business investors want to work with the Administration and Congress to promote tax and other policies that expand opportunity for small businesses and remove obstacles to small business growth and job creation. Without more small business investment, we cannot expand opportunity.
About the Small Business Investor Alliance (SBIA)
The Small Business Investor Alliance (SBIA) is the premier organization of lower middle market private equity funds and investors. SBIA works on behalf of its members as a tireless advocate for policies that promote competitive markets and robust domestic investment for growing small businesses. SBIA has been playing a pivotal role in promoting the growth and vitality of the private equity industry for over 60 years. For more information, visit www.SBIA.org or call (202) 628-5055.