OPINION

Sen. Mike Crapo, R-Idaho, is a high-stakes gambler.

In all human history, no one has ever made a bet even close to the magnitude of the one Sen. Crapo and some of his U.S. Senate Republican colleagues are making right now.

The stakes?

Nothing less than the fate of the U.S. economy.

The odds?

About the same as a coin flip, maybe a little better.

Senate Republicans are betting that, come next year, their party will control the White House and both houses of Congress.

If the bet pays off, Crapo gets to play a pivotal role in shaping the legislation that will extend the Trump tax cuts.

If not, American small business owners and their employees (who account for almost half of the entire U.S. workforce) are in for a world of misery.

On Jan. 31 of this year, the U.S. House of Representatives passed HR 7024, the Tax Relief for American Families and Workers Act of 2024, with a bipartisan super-majority of 357-70.

The bill resurrects a key element of the Tax Cuts and Jobs Act of 2017 – full and immediate expensing of business investments – that had begun to be automatically phased out.

It was viewed as a lifeline by small business owners nationally, many of whom filed for extensions on their 2023 tax returns in hopes that the Senate would pass this common-sense legislation, which would have retroactively restored full expensing and spared them from a de facto tax increase.

It’s difficult to overstate how badly small businesses needed this relief.

The Biden administration is basically at war with American small business, imposing impossible new burdens and stealthily hiking taxes.

These actions victimize the very people who serve as one of the main engines of job creation and economic growth in the United States.

For example, in April, the U.S. Department of Labor (DOL) announced that it was unilaterally changing the rules for salaried employees.

On July 1, 2024, and again on Jan. 1, 2025, the Department is dramatically increasing the so-called “overtime threshold.” For small business owners, this is like raising the minimum wage for salaried employees.

Unlike hourly employees, who get paid for their time, salaried employees get paid to perform specific functions – they don’t have to punch a clock, because all that matters is that the job gets done.

Under the new rules, salaried employees who earn up to $43,888 are essentially given an incentive to do their jobs less efficiently in order to earn overtime pay.

The only way for business owners to avoid this misalignment of incentives is to raise salaries, which of course translates not only to higher costs for the business, but also more tax revenue for the government. And the unelected bureaucrats in Biden’s Labor Department didn’t even need an act of Congress to impose this radical mandate.

Meanwhile, small business owners are struggling to navigate the fallout from the Corporate Transparency Act, which went into effect on Jan. 1. The CTA is the federal government’s latest attempt to outsource fraud prevention to the private sector through forced cooperation with yet another new government agency.

An estimated 32 million business entities are affected by the new law, which imposes five-figure fines and potentially even jail time for entrepreneurs and investors who fail to provide detailed personal information to the Treasury Department’s Financial Crimes Enforcement Network.

Unsurprisingly to anyone who understands “business as usual” in Washington, D.C. the new requirements only apply to small businesses, not the major corporations that can afford to shell out millions of dollars per year on lobbying and campaign donations.

With so many new costs, obligations, and burdens bearing down on them, it’s no surprise that small business owners were waiting with bated breath for a lifeline from Washington in the form of full capital expensing – especially after the measure passed the House of Representatives with a large, bipartisan majority.

The only reason the bill hasn’t passed the Senate is because of the opposition of Sen. Crapo, who seems to be holding out for a better deal on taxes in 2025 if Republicans win control of the White House and a majority in Congress.

Crapo’s big bet may or may not make sense to political insiders, but business owners are bitterly disappointed.

While the rest of the world – including allies such as the United Kingdom and rivals such as China – embrace full expensing, U.S. business owners are forced to wait and hope that Crapo’s delay doesn’t become permanent.

All we can do at this point is cross our fingers and hope that Crapo’s bet pays off before the Biden administration’s war on American business cripples the U.S. economy.

Julio Gonzalez is the CEO and Founder of Engineered Tax Services, Inc.

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