WASHINGTON, D.C. – Today, Chairman Roger Williams (R-TX) led a full Committee on Small Business hearing titled “Tax Day: Exploring the Adverse Effects of High Taxes and a Complex Tax Code.” Chairman Williams issued the following statement after today’s hearing.

“I’m very grateful to have held today’s hearing focusing on how high taxes can suffocate any business, especially small businesses,” said Chairman Williams. “As small businesses face harsh economic headwinds, the Biden Administration is trying to tax them into oblivion. I believe the 2017 Tax Cuts and Jobs Act fundamentally proved that lowering taxes is good for all Americans, small businesses, and the American economy. We in Congress must work to ensure the tax code is working for our nation’s entrepreneurs, not against them.”

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Watch the full hearing here.

Below are some key excerpts from today’s hearing:

Chairman Williams: “Tax policy is the single most important thing we can do to help all entrepreneurs facing these challenges. And when a business owner is able to keep some of their profits, they don't just put in the bank, let it sit there, we spend it. They hire additional workers, it creates more taxpayers, or they buy the extra equipment to keep their business growing. So, Mr. Huff, can you discuss how you were able to utilize the 199A small business deduction to grow your business? And more generally, what you do when you are able to keep more of your hard-earned money?” Mr. Huff: “In my case, I wasn't, up on tax law. And my CPA in 2019 called and says, ‘you invested in equipment and did a self-serve store, and the 199A and the bonus depreciation is available to you.’ I said, ‘what's that mean?’ He says, ‘it means you have more cash.’ I was shocked. I call that an Easter Egg. I did not know that that was going to be the effect. Doing that, having that extra funds, I then invested in 2019 in additional technology that actually paid to keep my stores open during the Covid, times. So the 199A and the bonus depreciation helped me tremendously in those two years.”

Rep. Meuser: “Mr. Wetherington, R&D tax credit. Very important. I was looking at your products. Of course, a lot goes into that. Design engineers, all types of engineers, that gets reduced or even now with, with the with the 20 percent over a five year period. How has that affected your business, your profitability, your hiring, your growth, and your R&D investment?” Mr. Wetherington: “Well, as I stated in my testimony, this is slowing us down from bringing out, major redesigns of our two flagship products that represent 80 percent of our product revenue. Our expectation is that we're going to grow by 50 percent once those launch, but we continue to have to push those out because of the inability to, to cover the expenses without the assuredness of having the R&D tax credit. It's back to predictability and consistency in what the code is.”

Rep. Van Duyne: “It's great to hear that we actually are hearing from small business owners, mom and pop shops and others who have actually been able to take advantage of the TCJA. Mr. Hedlund, I'm going to ask you, President Biden's budget proposal contains many new tax provisions. Does any particular proposal stick out as being the worst for small business?” Dr. Hedlund: “There's a lot of bad options to pick from. It's hard to pick one of them but I'd say the worst thing we could do for the economy right now is to hike taxes. When people have already been paying the inflation tax and the regulatory tax. This would make the cost of living crisis worse, make our growth worse, and not be good for the economy.” Rep. Van Duyne: “So you've heard President Biden repeatedly state that he is not going to tax anyone making less than $400,000. Is that accurate?” Dr. Hedlund: “Well, that promise has already been broken. As I mentioned, the inflation tax. The typical American family has seen their real income fall by $4,000 because of inflation. And that will just be compounded by the expiration of thousands of dollars worth of tax cuts to them if that were to be allowed to happen.”

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