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Sarah Crozier, sarah@mainstreetalliance.org, 303-868-9600
As critical federal coronavirus relief legislation remains stalled in negotiations between lawmakers and the White House,a new poll from Color Of Change and Main Street Alliance out today reveals Black-owned small businesses are being decimated by government inaction and racial inequities. Barring swift and decisive action by Congress to provide direct grants to Black small business owners, the poll indicates Black small businesses are on the brink of extinction, with 46% either already forced to close or planning to close within the next six months.
The new nationwide poll surveyed 600 small business owners representing a range of demographics on the impact of COVID-19 on their businesses as well as their views of federal coronavirus relief measures. Coupled with the findings of Color Of Change's previous Paycheck Protection Program poll released in May, andstories from Main Street Alliance membersthis Fall, the results of the new survey clearly reinforce the dire need for both improved and immediate government relief in order to save Black small businesses and the communities they prop up.
"Our new poll emphasizes what so many Black small business owners already know: unless Congress works quickly to pass new relief legislation and address the racial inequities that exist within current relief measures, a disproportionate number of Black small businesses will shutter forever," said Color Of Change President Rashad Robinson. "Small businesses are the cornerstone of our communities. The devastating consequences of these closures will ripple throughout Black communities and last for generations. Our federal government can no longer wait to bring immediate, accessible relief to Black small businesses."
Black-owned businesses not only generate billions of dollars for the economy annually and create thousands of jobs but also provide critical avenues of upward mobility and independence for Black people, generate monetary support for racial justice causes, and create physical spaces where employees and community members can engage in meaningful activism. In fact, the new survey shows Black and Latinx owners are more likely than Asian and white owners to be engaged in a range of community activities. Additionally, Black small business owners are most likely to make statements in support of racial justice causes at 46%, in comparison to 24% of Latinx owners, 21% of Asian owners, and 14% of white owners. The decimation of Black small businesses therefore threatens not only individual Black people and families but entire communities and racial justice movements.
Beyond illustrating the unanimous need for relief, the survey also indicates that any new measures must better address the needs of Black small businesses. The results paint a picture of how the Paycheck Protection Program and other federal relief measures present too many barriers to access and offer insufficient support to Black businesses. Despite being more likely to apply for PPP support, Black small business owners had to wait longer to hear back about their application and were less likely to receive the amount of assistance they requested. Only 33% of Black PPP applicants received a response within 2 weeks, whereas 50% of Latinx and 44% of white recipients heard back in two weeks. Further, only 37% of Black small business owners received the amount of assistance they requested.
The inequities and hurdles baked into the PPP application process and existing legislation have fueled sentiment among small business owners that COVID relief measures were not designed to help them. Across racial and ethnic subgroups, the poll shows that a majority of small business owners believe COVID-19 relief packages were passed in the interests of major corporations rather than small businesses and working people. Black owners were most likely to believe this, with 77% agreeing.
"As Senate Republicans scramble to push through the installation of a new supreme court justice, the stakes of this moment couldn't be higher for millions of small businesses and working families across our nation suffering financial devastation from the ongoing economic impacts of COVID," said Amanda Ballantyne, Executive Director of Main Street Alliance."Our polling results are clear on what small business owners believe they need to succeed. With the right investments in long term federal relief designed to rebuild our struggling small business sector, we can not only stem the tide of economic loss, we can rebuild our economy and put ourselves on a path to a more equitable and sustainable economy where small business owners and working people can thrive. But we do not have months to wait."
The survey shows that while grants are a priority across business groups, Black business owners are most likely to see federal grants as a top priority compared to other racial groups, indicating the need for direct grants rather than loans as well as measures like PPP set-asides for businesses with ten or fewer employees -- a category an overwhelming majority of Black businesses fall under.
A summary of key takeaways can be found here.
Methodology:
Lake Research Partners designed and administered this survey that was conducted online nationwide between August 31 - September 16, 2020. The survey reached a total of 600 small business owners with oversamples of 100 Black small business owners, and 100 Latinx or Asian American or Pacific Islander small business owners. The sample was drawn from an online panel of small business owners and respondents were screened to be the current owner of a small business in the United States, who operates and makes decisions for the business, operates a for profit business, and employs 0-49 employees including themselves and excluding contractors, with a cap of 25% of respondents who employed 1 person before the pandemic and currently employ 1 person. To ensure the data reflects attributes of the actual population of small business owners in the U.S., the base sample was weighted by gender, region, age, race, and number of employees prior to the COVID-19 pandemic. The sample of Black small business owners was weighted by gender and age. The sample of Latinx and Asian American Pacific Islander small business owners was weighted by gender, region, race, and number of employees prior to the COVID-19 pandemic. The overall margin of error for the entire sample is +/- 4.0.
The Main Street Alliance (MSA) is a national network of small business coalitions working to build a new voice for small businesses on important public policy issues. Main Street Alliance members are working throughout the country to build policies that work for business owners, their employees, and the communities they serve.
"Banning buying homes based on citizenship and registering your property did not bode well in history," said one lawmaker. "This is the Republicans rewriting the Chinese Exclusion Act."
Days after a group of Chinese citizens sued Florida's government over its new law restricting Chinese citizens from purchasing property in the state, U.S. Rep. Al Green this week warned of a "proliferation" of such bans and unveiled federal legislation to prohibit them.
The proposal would affirm that federal law, such as the Fair Housing Act, takes precedence over state bans restricting who can and cannot legally purchase real estate or farmland. It would also allow people to sue in federal court and have a right to court-ordered relief including an injunction if they've been harmed by bans like the one approved by Republican Florida Gov. Ron DeSantis.
The Fair Housing Act explicitly prohibits discrimination in housing based on national origin, race, sex, gender identity, religion, and disability.
Despite the long-standing law, Florida this month became the latest state to pass restrictions on property ownership, targeting Chinese, Russian, Iranian, Syrian, Cuban, Venezuelan, and North Korean citizens. DeSantis claimed Chinese people have been "gobbling up" land in the state and said the law is intended to stop the Chinese Communist Party from gaining influence and spying in the state.
"That is not in the best interests of Florida to have the Chinese Communist Party owning farmland, owning land close to military bases," said the governor, who announced his 2024 presidential campaign this week.
Utah Gov. Spencer Cox, also a Republican, signed a ban on Chinese companies buying property in March, and the Texas Legislature had advanced a similar bill targeting companies and government entities headquartered in China, Russia, North Korea, and Iran.
According to the National Agricultural Law Center, 21 states have laws restricting foreign ownership of farmland. More than 30 states have drafted or advanced legislation to either tighten those restrictions or introduce new ones.
"I don't think we ought to allow 50 states to have the opportunity to pass laws that can impact foreign affairs, which really is the province of the executive branch of the federal government," Green told HuffPost on Thursday. "I don't think we should wait until we get 30, 50, whatever number of different laws to act."
The measures have drawn comparisons to the so-called "alien land laws" that were in place in the early 20th century before being struck down by courts and state legislatures. The laws prohibited Chinese and Japanese immigrants from owning land and "severely exacerbated violence and discrimination against Asian communities," according to the ACLU, which is representing the plaintiffs in the lawsuit filed in Florida this week.
"Banning buying homes based on citizenship and registering your property did not bode well in history... This is the Republicans rewriting the Chinese Exclusion Act," said Rep. Grace Meng (D-N.Y.) this week, referring to the 1882 law that banned Chinese workers from immigrating to the United States.
\u201c\u2026when you ask me why we worry about anti-China rhetoric\u2026 many people can\u2019t differentiate between someone who works for the CCP from an average Chinese American. These laws will increase anti Asian suspicion & hate. https://t.co/z7j9TuyfA3\u201d— Grace Meng (@Grace Meng) 1684285341
Contrary to DeSantis' claim that Chinese citizens are buying large amounts of property across Florida, according to the U.S. Department of Agriculture's Farm Service Agency, foreigners owned only 3.1% of farmland at the end of 2021, and about a third of that land was owned by Canadians. Less than 1% of the land—0.03% of all farmland in the U.S.—was owned by Chinese citizens or entities.
"Hey, hey! What we knew would happen: Make the wealthiest pay their fair share and it finances investments in education, transportation, and more," said Rep. Pramila Jayapal.
Proponents of progressive taxation on Friday pointed to data showing Washington state stands poised to reap $849 million in revenue during the first year of its capital gains tax as proof that taxing the rich works—and could serve as a template for federal legislation.
The Seattle Timesreports that when Washington state lawmakers passed this fiscal year's budget, they anticipated collecting $248 million in revenue from the 7% tax on the sale or exchange of stocks, bonds, and certain other assets above $250,000.
However, the legislators were pleasantly surprised when figures showed the state has collected over $600 million more than that.
While the amount collected could change after around 2,500 taxpayers who applied for extensions file their returns, progressives welcomed the windfall that will fund public schools, early childhood education, and building and repairing schools across the state.
"Hey, hey! What we knew would happen: Make the wealthiest pay their fair share and it finances investments in education, transportation, and more," tweeted Congressional Progressive Caucus Chair Pramila Jayapal (D-Wash.).
\u201cTurns out taxing the rich is a really good idea and can help fund our public schools https://t.co/HX2dPp63UX\u201d— Robert Cruickshank (@Robert Cruickshank) 1685113329
Jayapal touted federal legislation she introduced with Sen. Elizabeth Warren (D-Mass.) in 2021—the Ultra-Millionaire Tax Act—that would levy a 2% annual tax on the net worth of households and trusts above $50 million, plus a 1% annual surtax on billionaires.
An analysis by University of California, Berkeley economists Emmanuel Saez and Gabriel Zucman found that the legislation would bring in at least $3 trillion in revenue over 10 years without raising taxes on 99.95% of American households worth less than $50 million.
Last month, Warren, Sen. Bernie Sanders (I-Vt.), and Rep. Jimmy Gomez (D-Calif.) introduced the For the 99.5% Act, which would impose a 45% tax on estates worth between $3.5 million and $10 million, a 50% tax on estates worth between $10 million and $50 million, a 55% tax on estates worth between $50 million and $1 billion, and a 65% tax on estates valued at over $1 billion.
Meanwhile, congressional Republicans are trying to repeal the estate tax entirely—and pass other tax policies to serve the rich.
Back at the state level, California, New York, Illinois, Maryland, Connecticut, and Hawaii have also introduced wealth tax bills this year, while Washington's law was upheld by that state's Supreme Court in March.
"If the federal government won't act," California Assemblymember Alex Lee (D-24) said while introducing a wealth tax bill in January, "we the states will."
Numerous progressive lawmakers, legal scholars, and advocacy groups have implored the president to use his authority under the 14th Amendment to prevent a GOP-induced default.
A top U.S. Treasury Department official said Friday that President Joe Biden will not use his 14th Amendment authority to continue paying the nation's bills and avert a Republican-induced default if tenuousdebt ceiling talks with the GOP fall apart.
Asked by CNN's Poppy Harlow whether the Biden administration would attempt to invoke the 14th Amendment if a deal with Republicans appears out of reach, Deputy Treasury Secretary Wally Adeyemo responded that "the 14th Amendment can't solve our challenges."
"Now, ultimately, the only thing that can do that is Congress doing what it's done 78 other times, raising the debt limit," said Adeyemo. "We don't have a Plan B that allows us to meet the commitments that we've made to our creditors, to our seniors, to our veterans, to the American people."
When asked if that was a "no," Adeyemo replied: "I think the president and the [Treasury] secretary have been very clear that that will not solve our problems now. So yes, that is a no."
Watch:
\u201c\u201cNo.\u201d Deputy Treasury Secretary @wallyadeyemo tells me definitely the Biden administration will not invoke the 14th Amendment even if there is no deal to raise the debt ceiling by June 1st. @USTreasury\u201d— Poppy Harlow (@Poppy Harlow) 1685101109
A number of advocacy groups, constitutional scholars, and lawmakers have implored Biden to at least consider using his 14th Amendment authority to prevent a default as the June 1 " X-date" approaches. The amendment states that "the validity of the public debt of the United States... shall not be questioned."
Default, as UCLA School of Law professor Joseph Fishkin recently pointed out, would "violate the 14th Amendment, which is not an 'option,' but a bedrock of our constitutional order—it is there whether or not anybody invokes it."
"The Biden administration has a constitutional duty to 'take care that the laws be faithfully executed,'" Fishkin wrote last week. "That means all the laws Congress has enacted, not just the debt-ceiling law."
On Thursday night, Sen. Bernie Sanders (I-Vt.) toldCNN's Anderson Cooper that while he doesn't think the 14th Amendment is a "wonderful solution" to the debt ceiling crisis, he sees it as preferable to allowing Republicans to tank the global economy in pursuit of massive cuts to aid programs.
While Biden said earlier this month that he was considering making use of his 14th Amendment powers to stop an economic catastrophe, he has questioned whether such a move would survive legal challenges.
Sanders said Thursday that he believes it would.
"I think the courts do not want to see the world economy crumble," said Sanders, "and I think it would be sustained."
"If he wants to protect his reputation and our country, he should refuse to budge an inch on the debt ceiling and use his constitutional authority under the 14th Amendment to bypass this entire manufactured crisis."
With June 1 just six days away, White House negotiators and Republican lawmakers are discussing an agreement that would lift the debt ceiling for two years in exchange for two-year spending caps that would cut federal spending, impacting nutrition assistance, housing aid, and other key domestic programs.
The deal that the White House and GOP are discussing would also slash $10 billion from recently approved funding for the Internal Revenue Service, a move that critics said would be a major gift to rich tax cheats.
"A debt ceiling agreement that cuts IRS funding would be an embarrassing disgrace for both the GOP and President Biden," Morris Pearl, chair of the Patriotic Millionaires, said in a statement Friday. "Agreeing to IRS funding cuts as a bargaining chip in debt ceiling negotiations would be an enormous stain on Biden's legacy."
"If he wants to protect his reputation and our country," Pearl added, "he should refuse to budge an inch on the debt ceiling and use his constitutional authority under the 14th Amendment to bypass this entire manufactured crisis."
Biden and Treasury Secretary Janet Yellen are the plaintiffs in a lawsuit filed earlier this month by the National Association of Government Employees (NAGE), a union that argues the debt ceiling is unconstitutional.
The president has signaled he will oppose the lawsuit, and a hearing in the case has been set for May 31—one day before the "X-date."