GREENVILLE — State Republicans told Pitt County small-business owners Tuesday that things will only get worse for them under President Joe Biden’s policies.
U.S. Rep. Greg Murphy and N.C. Republican Party Chairman Michael Whatley met with a handful of local business owners at Parker’s Barbecue to discuss the outlook for small businesses in food service, fitness and retail already hit hard by supply chain and staffing shortages.
“We headed into 2019 as our record year,” said Greg Greene, owner and operator of Great Harvest Bread Company in Greenville. “Then 2020 hit and, like most businesses we really struggled. We lost about $200,000 in sales, had to spend $50,000 to add a drive-through just to stay in business and had to take out a disaster relief loan. All said and done, 2020 was about a $400,000 hit for us as far as what we lost and what we had to take on.”
Greene and business owners like Billy Parker of Parker’s Barbecue told Murphy and Whatley they raised wages to address staffing shortages but to little avail. Positions once in high demand aren’t attracting any applications, according to Greene.
The small-business owners also expressed concerns about more federal government spending. Earlier this month, Biden said he expected his $3.5 trillion package of social and environmental initiatives more likely would be between $1.9 trillion and $2.3 trillion, The Associated Press reported.
Biden’s package would require paid family and medical leave; extended tax breaks for families with children, low earners and those buying health insurance; expanded Medicare coverage; and free pre-kindergarten and community college. The money is expected to come in part from a tax on the wealthy and corporate America.
“There has been a lot of talk now about tax increases,” Murphy said. “Inflation is a tax increase on the poor. They have to pay their income to go across town to buy a cheeseburger to do anything. By these economic policies, some of which are not to blame but some of which are, with out-of-control spending being one of them, inflationary pressures rise and you hurt the poor disproportionately.”
The businesspeople said they worried that Biden’s proposed tax increases would make things harder for their businesses.
“It exacerbates the problem that we are already in,” Parker said. “Especially in restaurants, the margins are very thin in restaurants. ... In our business now, our margins are being compressed so much with an increase in wages, food inflation. ... You can’t raise prices enough to cover costs and keep your business. A tax increase for family-owned businesses like ours is brutal. It would be brutal.”
Todd Browder, a co-owner of Pirate Popcorn, said that taxing corporations is not the answer. Biden’s proposal calls for returning the top income tax rate to 39.6%, up from the 37% under Donald Trump’s tax cuts.
“There seems to be this phenomenon that corporations are just rich,” Browder said. “They really have a target return of around 10 percent. You have to have a 10-percent return to get people to invest in your corporation. Without that return, no one is going to invest in your business. If you raise taxes, that is just one more expense to overcome.”
Murphy said that, on a federal level, supply chain issues are not being addressed. He said that the pandemic revealed that as a U.S. weakness.
“I wish I could say there were good things being done about supply chain issues,” Murphy said. “One of the silver linings of the pandemic was it showed our dependence on foreign nations, many of whom are not our friends, especially China. ... We are not getting the people, we do not have people in the ports to offload ships. We are seeing that on the West Coast right now.”
Murphy described the problem as one of “philosophy.”
“Do you add more government to it, or do you decrease the regulation so things can run more smoothly?” he asked.
Ellie Dougherty, a spokeswoman for the North Carolina Democratic Party, said that Murphy and other Republicans who want to cut taxes for the wealthy is not in the best interest of Americans.
“The Build Back Better package will cost zero dollars, won’t add a penny to the deficit, and will improve the lives of working families in North Carolina and across the country,” Dougherty said in a statement. “That stands in stark contrast to Republicans’ $2 trillion dollar tax cuts for corporations and the wealthiest Americans at the expense of middle class families. The GOP has repeatedly proven that they have no interest in serving North Carolinians and the American people.”
Murphy, a physician, also said that the pandemic is being used as a scapegoat by Democrats who seek to cover up the nation’s economy’s shortcomings.
“I get the (COVID-19) numbers every week from what is going on in eastern North Carolina and ... what I have seen in the last 96 hours is those numbers decreasing,” Murphy said. “I am tired of hearing the excuse ‘It is the pandemic, it is the pandemic.’ It is not the pandemic. What is going on in the economy right now is disastrous economic policy.”