Shaundell Newsome of Sumnu Marketing in Las Vegas is celebrating the Inflation Reduction Act, the sweeping $750 billion federal health care, tax and climate bill signed into law this month by President Joe Biden.
Sumnu, a marketing firm with eight employees that caters to small business clients in the Las Vegas Valley, will be better off because of the act, which Newsome said will help employees on a number of fronts.
The new law requires companies the government deems as the largest and most profitable—those that bring in at least $1 billion in income annually—to pay a minimum tax of 15% on corporate profits.
“One thing I know that small businesses always ask for is for taxes to be equitable,” said Newsome. “Over the past few years, some of the big companies paid more like 6% or, in some cases, no taxes.”
According to a recent survey of over 600 small business owners commissioned by a nonprofit called Small Business for America’s Future, nearly three out of four respondents said they supported the Inflation Reduction Act.
At the very least, Newsome said, the act will provide a sense of hope to small business owners—many of whom have long advocated for larger corporations to be taxed at a higher rate.
It’s a group of business owners with whom Newsome has a strong relationship, as the marketing company specializes in promoting small organizations throughout Southern Nevada.
“The more things that can be done to help our small business employees, the better they feel, which will mean they’re more productive,” Newsome said. “As the owner of a small business, you know how your employees are feeling and how they’re doing on any particular day. You understand what’s bothering them, and a lot of the things that keep them up at night also keep us as business owners up at night.”
About 90% of respondents in the Small Business for America’s Future survey said their business has been impacted by consumer inflation—which jumped to levels not seen in four decades this year—while 96% said they believed it is important that Congress and the Biden administration to address soaring prices.
“Small business owners are making an economic impact at the local levels,” Newsome said. “Jeff Bezos and Elon Musk aren’t coming into our local communities. Instead, it’s the small business guy who’s buying groceries locally and spending money at the dry cleaners and at the ballpark. There’s a big difference between big business and small business.”
Newsome said “big business” interests like Amazon and other large corporations got “a lot of what they asked for” during the Trump administration. He said more advocacy for the small business sector was needed under President Biden and other Democratic leaders.
Lydia High, a former UNLV finance instructor and the founder of the Precise Business Management accounting firm, said her company works with several dozen local small businesses, including some in the retail, manufacturing and food industries.
She said one of the most important aspects of the act is how it will work to better fund the Internal Revenue Service, including billions of dollars that will go toward the addition of more agents to enforce the tax code.
The act earmarked $80 billion for the IRS, money that will go toward a host of areas, including improvements in technology and the hiring of more auditors.
According to the White House, about $124 billion will be generated over 10 years simply because the act will make resources available to allow the IRS to collect taxes already owed by the wealthy and large corporations.
High said she believes that the IRS at times would work to find violations by middle-class Americans and small businessowners because it’s generally more expensive and more labor intensive to police wealthy individuals and large corporations. “I think this act could help level the playing field,” she said. “We’ll see how it all plays out.”
High, who came to the Las Vegas area from California nearly two decades ago, noted that many small businessowners in the valley have been through some difficult years lately, especially with the disruptions and supply chain issues that were caused by the pandemic.
“It’s difficult to grow now, and sustainability is difficult for these businesses,” High said. “I am expecting that we go into more of a recession the rest of the year and into 2023, but as a small business owner myself, I’m always optimistic. There’s a big percentage of Nevadans who work for themselves and that number is growing.”
According to a recent opinion piece authored by SBA Region 6 administrator Ted James, the act will also help save some small businesses close to $500 per year on energy bills.