Business Community Struggles With Tax Hikes Amid Ongoing Recession

Business Community Struggles With Tax Hikes Amid Ongoing Recession

( – The US economy is walking a tightrope as inflation continues to put the hurt on Americans and the Federal Reserve attempts to rein it in. As a result, America is on the brink of a recession, which isn’t good news for anyone. The blows keep coming as the country’s businesses are now facing increased taxes in addition to the rocky economy.

As some economists expect a recession, the tax hikes recently passed by Democrats — in addition to ones Republicans presented years ago — could add to the financial stress of employers. The hikes range from restrictions on deductions, such as how much a business can claim on investments, all the way to a fresh corporate tax. In all the new increases are set to cost businesses over $100 billion, around one-fourth of what they paid altogether in 2022.

The business community is pleading with lawmakers to repeal the tax increases, and its members are almost certain to grow louder as the economy continues to decline. Congressional assistance is unlikely, though, thanks to a divided Congress. The National Association of Manufacturers managing vice president for tax, Chris Netram, told POLITICO that businesses are experiencing a “particularly challenging moment in time.” The vice president added if lawmakers pile higher taxes on top of the declining economy, it will put businesses “in a bind.”

The tax increases are the opposite of how lawmakers typically handle an economic downturn. Usually legislators use the tax system and look for ways to bring taxes down in an effort to shield businesses and individuals from the impact. Corporate advocates were hoping Congress would drop at least a handful of the tax hikes during its lame duck session in December. However, those dreams dissolved thanks to discourse over the Democratic demand to raise the Child Tax Credit.

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