Southern small business owners and entrepreneurs described their difficulties under the Biden economy at a Friday field hearing by the House Ways and Means Committee.
Chair of the House Ways and Means Committee and Republican Missouri Rep. Jason Smith began the hearing by laying out the economic problems facing the American people. (RELATED: ‘Is This A Joke?’: Rep. Jason Smith Presses Janet Yellen On IRS Funding Boost)
I asked witnesses at our field hearing in Peachtree City, GA today how pro-growth, pro-worker, pro-small business tax reform makes a difference for their small businesses.
Here is what they said:
— Rep. Jason Smith (@RepJasonSmith) April 21, 2023
“Small businesses across Georgia and the United States have been battling on the front lines of the Biden economy for two years. Historic inflation, higher interest rates, and Help Wanted signs have come to define life in America for millions of people and businesses. For a lot of folks in this room, it feels like Washington has forgotten about them. We need to prioritize the families, farmers, and small businesses who build, feed, and power our nation,” Smith said.
“Since President Biden took office, the average American household has lost $10,000 due to higher prices on everything from food, to gas, to clothes. Real wages are down 3.5 percent. For working-class families, it means choosing between gas in your car and food on your table. Here in Georgia, gas prices alone have increased by over 50 percent, rising from just $2.16 in January 2021 to over $3.38 today,” he continued.
The House Ways and Means Committee heard from multiple small business owners at a factory in Peachtree City, Georgia. David Bergmann, founder of airplane parts manufacturer NAECO, talked about how the supply chain crisis and trade policy affected his business.
“We are in the materials business, and I’ve learned there are actually sufficient raw materials to satisfy demand, but everything in-between, from industrial capacity to logistics capacity to work force availability, seems in short supply,” Bergmann said. “I want to point out that this building and this business would not exist if not for 20 years of India GSP trade policy. Over those 20 years we built export programs, I built this manufacturing operation, and we successfully competed against Chinese competitors.”
The effects of inflation and labor shortages were highlighted by Matt Livingston, a small business owner who runs a home construction business and a family restaurant.
“We have been forced on several occasions to ‘shut the doors’ for a day or two due to staff shortages. We had to permanently shut the doors on three and combine staff just to operate one. We are facing times now where people just don’t show up,” Livingston said about the labor shortage.
He mentioned how inflation significantly increased costs and forced him to increase prices for customers.
“Inflation on the cost of goods sold, for the past few years, has had a significant impact on several items. We are paying outrageous prices for eggs, which in return increases the cost of every by product of that, mayonnaise, dressings, shortening, etc. Other huge cost increases include beef, pork, chicken, seafood, produce, french fries, sugar, plastic resin products and an abundance of other items. We are constantly having to change our menu prices to just keep our head above water,” he stated.
Alison Couch, who founded an accounting firm for small business clients, voiced her displeasure with the Biden administration’s $80 billion funding increase for the IRS passed as part of the Inflation Reduction Act of 2022.
“I would like to make you aware of some issues occurring with the ultimate taxing authority for our nation, the Internal Revenue Service (IRS) … The IRS continues to close phone lines, have extensive wait times, and long backlogs. To add insult to injury, the idea of funding this agency with $80 billion additional dollars to perform audits, which will add to all of their existing problems, before the current backlogs are cleared out and current calls are handled in a timely manner, is preposterous. I am here today
to ask you to NOT additionally fund the IRS with $80 billion dollars,” she said.
The hearing is part of the Ways and Means Committee’s series of field hearings about the state of the economy. Prior hearings in West Virginia and Oklahoma featured witness testimony about how inflation, supply chain issues, labor shortages and regulations are affecting small businesses.