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democracy. "washington journal" continues. host: joinings now, kevin kuhlman is with the national federation of independent business. thanks for joining us. guest: good morning. host: how would you characterize the people you represent? guest: we represent approximately 300,000 small business owners throughout the country. they are your typical main street business but also your backstreet business. they are typically eight to 12 employees but range from sole proprietors with zero employees all the way up to manufacturers with hundreds or thousands of employees. they are really and all industries but really are your prototypical american small businesses. host: when it comes to topics of discussion on capitol hill taking place such as the passage of the bill back at her plan,

and find one the people you represent, how my looking at this legislation? guest: it is a little overwhelming to digest. it is a very large piece of legislation around $1.7 trillion depending on who you ask. there are some spending programs many of which are temporary and are offset by some permanent tax increases. a couple of provisions or proposals that small business owners should be aware of our an expansion of previous taxes but only applied to investment income that will now apply to all business income above $400,000. we are deeming that a small business or tax because not only does it apply to all business income above those thresholds, those thresholds are not indexed for inflation. so it will absorb more businesses every single year and my business income every single year. there's also a paid family and medical leave requirement.

business owners of all sizes will have to comply with the program. lastly, there are increases in penalties and penalty exposure on the penalty side. employment law violations whether it is osha or the fair labor standards act. on the health care side, there is an expansion of the affordable care act employer mandate. specifically, the affordability definition. that increases penalties and penalty exposure. overall, there is a lot to digest and i think small business owners are overwhelmed. host: as far as something like the paid family leave act. why is that bad for small business because it gives some type of revenue for people who have sick children or sick families to take care of them. guest: it is just unfamiliar at this point in time. small businesses are struggling with a labor shortage.

half cannot fill open positions. that requires a flexible arrangement. previously, businesses with fewer than 50 employees were not subject to the family medical leave act. they are really unfamiliar with paid and medical leave policies. it is an unfamiliar policy that small business owners could disrupt or exacerbate their labor force challenges. host: that one thing was a statement the white house put out particularly when it comes to the build back better act and small businesses. they wrote this saying, revenue ratings from creating a fair tax system will help investment and create jobs including investments in small businesses. this includes creating a paid leave benefit leveling the playing field for small

businesses that cannot afford to provide this benefit. it also is has the agenda would increase access to contracting opportunities and create tens of billions of dollars in financing and technical assistance program -- programs. if that is the case, what is wrong with that approach? guest: that is one approach. you can call me a skeptic as to whether all of those reported benefits will come to fruition. i don't speak to any business owner who says i need the playing field level by changing a tax system or applying a new mandate onto businesses. they more often than not, when i speak to business owners, they want the government to get out of the way. i do push back on that with the federal government can help equal the playing field or level the playing field by applying new taxes or mandates onto businesses. we will see.

the paid family and medical leave program is in flexible, a little complicated. it is run by the federal government and will apply to all employers and then employers will have to apply for a complicated reimbursement system that provides partial reimbursement for the paid family and medical leave. we have seen previous mandates that have had for years to be implemented that had to be pushed back. we will see how this all plays out and we will see if it ends up being in the final legislation. i know there are certain senators concerned about the current workforce issues that small business owners are saying and say this might be too much for this particular legislation. host: i do want to invite the folks at home to call and ask our guests questions. if you are a small business owner, there is a number to call. if you are a small business

employee, there is a number to call. others, you can call in. if you want to text us, you can do so. though senators that have concerns, is this senator manchin, are there others and you think issues like the paid family leave will survive the senate revision of this bill? guest: we shall see. i know there are proponents pushing for it to remain in. senator manchin has expressed skepticism as to whether this is the same place -- the right place. there are current challenges that small business owners are facing whether it is filling open positions and workforce challenges, rising inflation and supply chain disruption. it is a very fragile small business recovery. but then, we are looking at these new proposals, massive changes that would be underway

that could provide headwinds. that is the part of -- that is part of the reason when we interview members that they anticipate their recovery will be pushed back further and further. many say they think it will be 2020 two or later before the local economy is back. host: is there another version of that type of program about the work in your mind? guest: there could be ones that work at the time and we have been analyzing these policies at the state and federal level for years. generally, when it is a mandate, it is pretty inflexible. there's is not much notice time. they don't end up working well for the small business owner. small business owners need flexibility, they cannot have a lot of compliance burdens on the backend.

these factors, we have learned in various mandates over time will complicate things and make the cost of business much more expensive. for program that works well with our businesses, we have seen other programs at the state level where it is relatively new, but there is not a mandate. similar bipartisan proposals in the senate. host: our first call comes from raymond on our line for others. you are on with kevin kuhlman. go ahead. caller: i have a question. what is an independent small business? i am seeing numbers as high as $50 million a year in gross revenue. hundreds of employees. when i think of a small business, i think of a business of 50 employees or less. what is a small business? guest: at the federal level,

there are dozens of different definitions. how and if i be -- nfib defines a small business is you cannot be publicly traded. a typical member has about eight to 12 employees. we hope they are growing businesses and adding employees and expanding the small business half of the economy, but it is really tough to say what exactly is a small business. the fba generally defined small business as fewer than 100 employees. it is a complicated question without an easy answer. host: when it comes to issues facing small businesses, one of the things currently being debated from the announcement a few weeks ago was the president past vaccine mandate. under osha, now it is going under legal review but as far as where it goes, how does it

currently impact businesses like the ones you represent? guest: again, that applies to businesses with 100 or more employees, although in the proposed regulation, they question as to whether it should apply to businesses with fewer than 100 employees. currently, there is a legal challenge to that. osha has temporarily suspended enforcement although they say they are confident that their legal case is strong and they will be able to implement it. as proposed, businesses with 100 or more employees would have to have a written proposal in place, would have to record whether their employees are vaccinated or not and require their nonvaccinated employees to mask at work as soon as december 5, just around the corner and a couple of weeks. it would then be january 4 when the emergency temporary standard

, the vaccine or weekly testing requirement would kick in. business owners must make a plan now despite the fact that the courts have temporarily halted implementation. we do expect an additional decision from the sixth circuit in the near future. this could go all the way to the supreme court so it is an extremely fluid situation but two dates i would point out where the december 6 requirement to have a plan in place and record whether your employees are vaccinated or not and then early january that deadline to have the vaccine mandate or weekly testing requirement in place. host: has your organization fought a legal challenge of its own on this? guest: nfib has because it puts businesses in the middle of the high temperature debate. it restricts the freedom of small business owners to decide how best to manage their

workforces, manage their business and imposes unwarranted burdens on small businesses that further threaten the small business recovery. host: there is a survey done by the u.s. chamber of congress when asked about the vaccine. a majority of those businesses hold, 64% of small business owners supporting small businesses requiring vaccines for employees. also saying similarly, 60% of support businesses in their area requiring vaccines for their employees. what do you think about the leverage us far as support? guest: the way nfib views this is small businesses have all of these headwinds going on whether it is workforce challenges, rising inflation or supply chain disruption. if you add one more element or mandate on top of that, you could really have trouble especially on the workforce side.

small businesses are struggling to fill open positions. we don't want to lose a lot of their employees that they currently have, or even just a few that they currently have because of this vaccine mandate. we view it as putting employers in the middle of the vaccine debate is not the right solution to solving it. host: our guest is with us until 9:30. if you are a small business owner, employee of the small business and all others. this is patsy, massachusetts. good morning. thanks for calling. caller: good morning. i am a small -- i was a small business owner before i retired. i'm calling to ask the question, has the large business tax credit that trump put in, like the first day in office, has that been repealed from the big business that may be that money

would be enough to help pay more for what we have. thank you. i just want to know if it has been repealed and if not, why. guest: thank you for the question. i believe you are referring to the 2017 tax law, the tax cuts and jobs act. in particular, i am assuming you are referring the corporate tax reduction, which would reduce the corporate tax rate from 35% all the way down to 21%. that has not been repealed. earlier proposals by the biden administration and congress did increase the corporate tax rate. those have since been dropped. there are certain senators concerned with how the would impact the economic recovery, and therefore, they have not

been repealed. if i am thinking of what your question refers to. host: a business owner in johnson city, tennessee. this is william. guest: hi, how are you? host: fine, thank you. caller: i want to lay out a couple of facts. small businesses, specialists like doctors, plumbers, pay 60% tax. corporations pay 20%. workers pay 25% to 35%. the investment class pays 0%. another interesting fact is that 26 of the democratic candidates were backed by billionaires. one of them was the achievement

of you later of energy. he started in coal, then went to manipulating gas by pushing environmentalism, and is now trying to get into wind and other things like that. host: you called in on our line for owners, what type of business do you own? caller: catering. host: what would you like to ask our guest? caller: if the small business owners and unions got together, we would not need government. we would not need billionaires and we should start the tax rate at $2 million and do it at 40% and go up to 90% like eisenhower did, and other economic people think we should, and to have a plunger attack and go after the

people that make money without paying taxes. that is plunger. host: ok, that is william in johnson city, tennessee. guest: thank you for the comment. i think many of our members feel similarly that small business owners do bear the brunt of a lot of taxation as currently proposed. some of these proposals would put the top individual or pass-through business rate, corporations, llcs, partnerships. 75% small employers are organized as such. in certain states, it would be near 60%. that might be where the math comes from. we do look out because the vast majority of our members are organized as those for the small business owners and really, this creates quite a disparity

between pass-through business owners and the corporate tax rate. we would like to see debbie more of a parody involved in the corporate rate -- there be more of a parody involved in the corporate rate. caller: can you hear me ok? host: you are on. caller: i am concerned about the constitutionality of this whole business mandates, lockdown, ever since march when the official global economic lockdown occurred worldwide. yet, i do business with teenagers, guiding them to colleges and i am disturbed that colleges have given in without a wimmer into this because what is going on is basically an biologically unsound. people are not learning about their immune system. to defend against any kind of virus. dr. david martin should be

googled and listened to. also, globalresource.ca is a website that will help people understand what is going on. host: regarding businesses and how they are impacted, what would you like to talk to our guest about? caller: what he is doing on a legal standpoint, what he is doing to bring this lawsuit, support the lawsuits against the people that are behind this pandemic. is he doing anything ago host: that is eric in massachusetts. guest: thank you. let me go back to last year when many states implemented lockdown orders or limitation orders. we did put up state level because nfib does advocate at the state and federal levels to limit the emergency powers which were being expanded.

we advocated to limit those at the state level because it was just kind of an arbitrary designation. you have a small retailer that is shut down and deemed non-essential when the large retailer down the street was allowed to continue to operate. we made a lot of progress of the state level. fast forward to now, we did bring up the legal challenge to the biden administration's department of labor occupational safety and health administration emergency temporary standard, the requirement that businesses with 100 or more employees require vaccination or weekly testing. we just believe that oversteps osha's authority given to them by congress. that is one legal challenge we have. it is a very fluid situation. there is a temporary injunction on the current vaccine mandate requirement. it is very fluid and they will be developments in the next couple of weeks on that likely. host: kevin kuhlman joining us.

it was during his renomination announcement that the president talked about his assessment of the economy particularly when it came to inflation. i want to play you a little of what he had to say and get your thoughts. [video clip] >> last year, the pandemic shutdown much of the global economy. now, there is a global reawakening creating both an incredible opportunity and tough challenges. as economies all across the world come back from this pandemic, america is leading the way. like every country in the world, we have to deal with these issues of rising costs, but remember, we have the skill and tools to get it under control. while other countries are stumbling out of this pandemic, we are racing ahead because so much of the rest of our economy is doing well because we have created so many new jobs as fast as we have. we are in a position to attack

inflation from the position of

they will be five or six months down the road before they will see any relief. that is problematic. that will continue to increase -- require them to increase prices. their plan to increase prices are hovering at record levels. it is not just marginally. 0% to 5%. many are having to increase prices 15%. they are worried about losing customers as they increase prices. they are caught between a rock and a hard place because of bad decisions. host: our recent survey shows 26% of those who serve to

increase employment at the business, 31% plan to make capital outlays or increasing inventory stop those surveys expected the economy to improve. how do you expand the valance moving forward and still be concerned about what's going on? guest: owners are doing the best to take care of the needs of their customers. they are unable to hire workers and receive the necessary supplies and inventories because of these disruptions. they want to create jobs. there is a desire to create jobs. they are having trouble filling those positions. they are trying to take advantage of the broader economic recovery but they are running into challenges and headwinds up ahead, thus slowing small business recovery. host: how much of that is because employers are raising starting salaries because people are being able to negotiate a price? guest: there is definitely a

challenge. small business owners are willing to compete for employees. they are increasing compensation. their plans to do so are at record levels. they are offering extended benefits, whether it is more generous health insurance, more flexible paid time off options, referral bonuses, hiring bonuses. they are pulling out all the tricks to try to retain and recruit qualified employees. unfortunately that increases prices. as your inputs increase, so do your prices. it is a challenge. small business owners are trying to meet those challenges. host: this is from west virginia, claire on the line for owners. caller: good morning. i'm calling from chester, west virginia. we are a sole proprietor business.

we did not find moneys in the government to help our business in anyway way because we did not have employees. we were wondering if there is a program you can give me a number for that can help an individual business? it's a motel on the river and wrap -- on route 2 and chester. guest: thank you. many recovery programs have expired. one of the unfortunate downsides to the bipartisan infrastructural law is earlier than expected ended the employee retention tax credit, ertc. that expired at the end of september versus december. there is a program, a loan, the fda injury disaster loan -- fba injury disaster loan. it's available through the end of the year, december 31, 2021.

to my knowledge that is the last program that does exist. there may be related to that economic injury disaster loan some advanced emergency grants associated with it. those are based on census tracts and whether your area lost economic activity. they are not available broadly but they are available in certain areas. go to sba.gov to check out those programs. the economic injury disaster loan, eidl. some of the grants associated with the eidl loans as well. host: for the money spent by congress or approved in the last administration and this one specifically to help small businesses, to what degree where the actual help? guest: there are a couple of program started by the previous administration and continued in this administration. the paycheck protection program

was a forgivable loan program, so long as businesses maintained or paid employees or met certain overhead needs. from our members' perspective it was pretty successful. three out of four small businesses applied. almost all received forgiveness for at least round 1. many are pursuing forgiveness around 2 -- for round 2. there were two rounds. a little more targeted on the second round. you had the economic injury disaster loan program i talked about. that was a loan done to the small business administration. many were reluctant to take on new debt. it was not as widely adopted as others. it is one that is still available now. we heard from many members who did take advantage of the employee retention tax credit. that is still available available -- available retroactively. if a business owner has not

looked into that, we recommend talking to a tax advisor about the employee retention tax credit. there were different programs. they might have worked for different businesses or business models. it really did help small businesses during the pandemic when there were high degrees of uncertainty and many were shut down or limited. host: you talked a couple of times about the supply chain. how many businesses you represent are dependent on those international supply chains? guest: the international supply chain created problems for local supply chains as well. half of small businesses have been negatively impacted or are currently suffering from disruptions. 60% think those disruptions will continue into the future. that number is staying steady or growing. it is one of the variables happening in the environment. there has been good news for

relief on the supply chain disruptions. we hope that continues. business owners expect to have continued supply chain issues. on top of other variables that exist. host: what you think of the biden administration's handling of the supply chain issue? guest: it is a challenge. they have made some changes to the ports allowing working with local counties as well to allow containers to be stacked up higher and they were previously. i think that was an intuitive step to do. we will see. business owners are not expecting immediate relief. there is a shortage of workforce challenges -- truck drivers, truck chassis. hopefully these issues can be worked out and resolved sooner rather than later. six months from now expectation that local economies recover is

not great news for the small business economy. host: this is from jill in columbus, ohio. an owner. caller: the reason i'm calling it i hired providers. they are usually young, students that come and and work with my son with autism. i noticed even pre-pandemic there has been labor shortages here. i have trouble hiring students and graduate students. i am shocked when i do hire somebody. they don't get the drivers license until they are 22 years old or 23. have you thought about advocating for bringing back driver's ed into high schools so young people can join the labor market? guest: i think it's a good idea to remove any barriers to this

workforce challenge whether that includes ringing driver's ed back to high schools or taking a look at any of the barriers causing problems for businesses to hire employees. it is not a new problem you identified. we asked members every month there never went business problem. finding qualified employees has been the top answer since 2018. it's just gotten bad recently with record high levels of those trying to hire or fill open positions and being unable to do so. host: that was jill. with us is matt smith of twitter. "what percentage of the gross domestic product is from small business versus big corporate behemoths?" guest: there is a small business half of the economy. it's about 44% to 45% of the gross domestic product from small businesses, those with fewer than 500 employees. they hired two thirds of all net new jobs.

they are an engine of job creation. just like the president said, they are pillars of the local economy. they are sponsoring little league and nonprofits and school events. they are important to small business economy from the national level but down to the local level. host: part of the administration's goal for build back better is to put money into the irs to help improve tax collections among those who might avoid taxes. what do think of that proposal? is there an effect on small business because of it? guest: there is a lot of funding, hundreds of millions of dollars to the enforcement agency in the build back better act. particularly an issue is increasing funding for the irs. proponents say they will be targeted only at audits of higher income individuals. i heard anecdotally that members are concerned about increased irs enforcement. one of the provisions not

included in the house bill but reports it may be revisited in the senate, and irs and treasury are pushing hard for it, is the increased irs reporting which would require financial institutions, banks and credit unions, to provide annual gross inflows and outflowss of customers. they may limit it to essentially business owners. that would be concerning to nfib members to have banking information, their annual gross inflows and outflows reported. the irs would target their audit based on that, but would increase their audit rate of business owners as a result. there are concerning proposals out there related to the increased irs enforcement and increased irs reporting. we will see wooden's of being in the proposal -- what is and the proposal. -- in the proposal.

marion from georgia. caller: i have three points or questions i would like to ask you. one is the definition of small business. if coke industries -- koch industries has 20 factories with 500 people, are they still koch industries considered small business because each factory has 500 people? the second one is the ppp loan that is forgiven. is that not the very definition of socialism, maybe for rich people? the third one is we have a real problem where nobody -- one party does not want to raise wages for working people. but because every family now needs two working people, a wife and husband both have to work,

aren't we just basically saying let's keep wages low but are taxpayer money is going to fund the child credit in the build back better? are we giving big corporations and all the -- host: we have your point. guest: as i said earlier there are many different definitions at the federal level for small business. generally the small business administration considers a small business a business with fewer than 500 employees, although they have some variation based on industry. other programs have different definitions. as far as ppp, i disagree it is socialism for rich people. these businesses were -- many businesses were shut down or limited as a result of covid-19.

i think the paycheck protection program provided a lot of benefits. get cap a lot of -- it kept a lot of employees connected to their place of employment. he provided relief from super swollen unemployment insurance roles. a lot of those had trouble keeping up with demand. it was a very successful program. no anticipated the pandemic would be as long a duration as it currently is. i do think both parties support rising wages. there might be two different perspectives of doing so, but increased wages are a good thing. small business owners are fine competing for employees. it is a challenge. it is good for the overall economy as wages increase. host: nick from west chester, pennsylvania on the line for others. caller: thank you very much. i'm a grad student at a public university.

i have student loan debt. i have about $17,000 in student loan debt. it is holding back so many people. i would like to ask you with us having about $1.7 trillion or more student loan debt what are you doing to push the biden administration to cancel all student loan debt? if your not trying to cancel all debt, why is that? guest: nfib represents small business owners. it is not -- we have not push for canceling student loan debt. nfib members are small business owners trying to hire employees, many of which are college grads and help them with that student loan debt. we do not have any researcher surveys from our membership that say it would necessitate us to take a position on whether to cancel student loan debt. host: what is your plan between

now and when congress comes back to debate over the build back better act? guest: nfib has been working on a small business survival campaign. as a grassroots organization we have made it a priority to connect small business owners with their members of congress to have them express their priorities and concerns with current proposals. as the proposals have developed and changed on a monthly, weekly or daily basis, we are doing our best to keep members informed of the changes and challenges in front of them. we are connecting members over the next couple of weeks with the senate to have them here from small business owners about what conditions are like in their state and local economies. talk about some other concerns with the build back better act. specifically proposed taxes and mandates imposed on small businesses. until the small business half of the economy recovers, the full economy will not recover to

pre-pandemic levels. we think congress and the administration should consider small business owners as they develop these policies. host: the website, ngib.com. thank you for joining us. happy holiday season to you. guest: don't forget about small business saturday right after thanksgiving. ♪

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