Just when you thought blue states couldn’t screw things up more than they already have, they go and outdo themselves.
Here, I’ll show you what I mean.
Remember those Paycheck Protection Program (PPP) loans that were given out last year? Struggling businesses received more than $525 billion in forgivable loans to help them survive hardships caused by the pandemic and lockdowns.
The IRS had intially planned to tax those funds, but ultimately backed down and formally provided a tax break on PPP funds for small business owners.
Unfortunately, some tax-hungry blue states are not following the IRS’s lead. Instead, they’re going after those business owners and hitting them with large tax bills.
Alfredo Ortiz, the President and CEO of the Job Creators Network, a group that advocates for the 30 million in American small businesses, said that the states attempting to tax small business’ PPP loans are “basically handing drowning men anchors.”
“We’re trying to ring the alarms on this, because it’s a huge issue,” Ortiz told Just the News. “The reality is that our small business owners don’t have that cash laying around. They used it for what they were asked to use, and told to use it, for,” meaning, maintaining payrolls during the lowest point of the pandemic last year. Ortiz says that the state taxes will be “completely unexpected expenses to most small business owners” and could send many more to insolvency or closure.
“We’re hearing this happen left and right in New York City. A lot of restauranteurs and restaurant owners are just closing up shop and saying ‘this is ridiculous, we don’t want any part of it,'” said Ortiz. Many of those owners are moving to places like Florida, where business has been open at workable capacity for months now, and the tax base is generally much more favorable.
Put simply: inflicting unexpected taxes on small businesses across the country whose owners used their PPP funds to maintain their employees’ salaries will not only drive some businesses to extinction, but will also limit the ability of others to hire once the economy is back in full swing.
In Virginia and Wisconsin, more than 200,000 small businesses are now liable for hundreds of millions of dollars in state taxes. In California, where more than 600,000 PPP loans were distributed, businesses that have barely been allowed to open at all this past year, are now facing millions in taxes they were not expecting. It should come as no surprise that small businesses of all sorts are picking up and moving to friendlier terrain especially when the Biden administration has paid little attention to their issues, Ortiz said.JustTheNews.com
Think about this…
Let’s say you’re a business owner. You barely survived last year. You took a PPP loan because it was forgivable, and you used those funds to stay afloat. Then, right as things are starting to look better, the state comes knocking and hands you a tax bill for tens of thousands of dollars.
You don’t have tens of thousands of dollars because all that money went to pay for employees, lease payments, and operations. But the state still wants its money!
If you’re like many business owners, you’d say enough is enough. You’d close your doors permanently or move to a friendlier state.
Which would mean more unemployed people and lower taxes for the state coming after you!
It’s insane when you think about it. But some states don’t seem to care much about business owners. And that doesn’t seem like it will change anytime soon.
Meanwhile, hundreds of thousands of people are moving to the freest states in America…
Over the course of a year a net of 788,381 people moved to Florida, New Hampshire, Tennessee, Texas and Virginia, the “freest” five states in America, according to the Fraser Institute’s annual Economic Freedom in North America index.FoxNews.com
What do you think about states like California, Wisconsin, and Virginia hitting struggling businesses with big tax bills? Leave a comment below.