BOSTON — President Joe Biden has pledged to provide more support for small businesses hammered by the financial impact of coronavirus pandemic, and while the state’s business leaders say they’re optimistic that more aid will be coming, they’re also worried some of the new administration’s policies may hurt them.
Biden, who was sworn into office Jan. 20, is proposing a $1.9 trillion relief package that would provide $440 billion for businesses, including a $15 billion grant program to help the hardest hit businesses and $175 billion for small business lending and investment programs.
But the Democrat also wants to double the federal minimum wage to $15 per hour, expand mandates for paid leave for workers and implement other policies that business leaders say could drag on the country’s economic recovery.
He’s also talked about raising taxes on top earners with incomes above $400,000, as well as increases in capital gains and payroll taxes.
“The additional help for businesses to get back on their feet is welcomed and much needed,” said Joe Bevilacqua, president of the Merrimack Valley Chamber of Commerce. “But there’s also a concern that we’re going to see an increased burden for businesses that don’t have the money to pay higher taxes.”
Chris Carlozzi, state president of the National Federation of Independent Businesses, said his organization shares concerns that the new administration will pursue policies that mean higher costs or that will squeeze business owners as they try to recover.
“The best way to help rebuild our nation’s Main Streets and forge a path forward to economic recovery is by making it affordable for small employers to create jobs and provide career opportunities for workers again,” he said.
A recent survey by Carlozzi’s group suggests 1 in 4 small businesses will close their doors amid the pandemic.
To be sure, Massachusetts already has a paid medical and family leave law that went into effect this year. Its minimum wage went up to $13.50 per hour this year and will rise to $15 by 2023. (New Hampshire’s minimum wage is the same as the federal minimum, currently set at $7.25 per hour.)
Biden has also talked about increasing the corporate tax rate, from 21% to 28%, partly reversing a rollback from 35% that was included in the 2017 Tax Cuts and Jobs Act signed by former President Donald Trump.
Business leaders say that could also impact many small and medium businesses that have benefitted from the tax cuts -- not just big corporations.
Massachusetts businesses are bracing for a surge of rising labor costs this year. Besides a higher minimum wage and new family leave law, businesses face larger health care premiums and a higher tax to help replenish the state’s depleted unemployment benefits fund.
Biden has emphasized the importance of small businesses in pandemic relief and vowed to focus on “mom and pop shops” as his administration takes shape.
“Our focus will be on small businesses on Main Street that aren’t wealthy and well connected, that are facing real economic hardships through no fault of their own,” Biden said during a press briefing two weeks ago.
“We’re going to direct relief to those businesses and others that have been so badly hit. We owe them that support to help them get through the other side of this crisis,” he said.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at firstname.lastname@example.org.