Congress created tax credits that are encouraging some businesses to support Democrat local officials’ attempts to enact COVID restrictions against citizens. This is just part of a growing list of ways the U.S. federal government is interfering in Texans’ lives and livelihoods.
In a Facebook livestream last Friday, local officials and other organizations attacked Gov. Greg Abbott for banning mask mandates. Johnny Livesay, operations director for Salt & Time (a butcher shop, Italian delicatessen, and restaurant in Austin), joined in attacking the governor and demanding local officials be allowed to mandate masks again.
Most businesses have opposed government economic restrictions and mandates in response to the Chinese coronavirus. Livesay’s reason for his stance is that he wants access to federal tax credits.
“The governor basically kneecapped businesses in Texas by eliminating the mask mandate, which took the access to the employer retention tax credit straight out of our pockets,” he said. Livesay is also board member of Good Work Austin, whose website says they are working on a plan for “greater diversity, equity, and justice.” They also claim to provide “access to low-cost health care and counseling options” for small businesses.
Texas Scorecard attempted to contact Livesay for clarification on this “tax credit.” Salt & Time co-owner Ben Runkle replied instead, correcting Livesay. “The issue around tax credits relates to dining room or other capacity limits, not mask mandates,” Runkle said. “But much like mask mandates, Governor Abbott has prohibited municipalities from implementing any sort of capacity limits.”
According to Runkle, if government officials brought back capacity limits, his business could benefit from the federal government. “For some businesses, ours included, we are not seeing a decrease in total sales (the other main way to qualify) but are feeling the pinch of increased costs largely caused by responding to COVID,” he said. “So, in that sense, we are unable to benefit from the federal funds available because of Abbott’s stance.”
Runkle is referring to the COVID “employee retention tax credit,” which Congress included in 2020’s Coronavirus Aid, Relief, and Economic Security (CARES) Act. In December, Congress changed and extended this credit through June 30, 2021.
Therefore, “eligible employers can now claim a refundable tax credit against the employer share of Social Security tax equal to 70% of the qualified wages they pay to employees after December 31, 2020, through June 30, 2021,” states the Internal Revenue Service. The maximum credit amount per employee per quarter is $7,000, up to $14,000 this year.
Employers only qualify for it if, in addition to operating from January 1 to June 30 of this year, their operation was partially or completely halted due to government restrictions.
“What’s the point of that limitation?” asked Baker Hughes, founding president of the Lone Star Patriots. “It’s just more complexity. Obviously, they don’t really intend to grant the tax credit to too many people.”
The only other qualifier is if “gross receipts” in one “calendar quarter” this year are 80 percent less compared to the same time in 2019, or 50 percent less if compared with the same time last year.
“If you’re down 80 percent, buddy, it’s over,” Hughes said. “You’ve already burned up all your operating capital, and now you’re down to the bone.”
Hughes doesn’t think much of this tax credit. “I think overall what they’re trying to do is they’re creating this adversarial business climate,” he said. “They want their big corporation money cows who are going to send money to their campaign. They want them to survive because they know they’re going to get a payback. They don’t give a d— about small business.”
Currently in Texas, some local officials are fighting Abbott so they can wield unchecked local control on citizens in the form of mask mandates. A tax credit incentivizing business to be anti-citizen is among other federal actions harming Texans.
President Joe Biden recently applauded Dallas Independent School District Superintendent Dr. Michael Hinojosa for mandating masks. The federal government is also interfering with border security in Texas by not stopping illegal border crossings, halting an “ambiguous” border security order of Abbott’s, and flying illegal immigrants across the nation from Texas airports.
The IRS’ explanation of the employee retention tax credit may be found here.