America is facing an unprecedented public health crisis. Thankfully, we are now acting with speed and resolve to minimize the spread of COVID-19, the novel coronavirus.
Quick and decisive action must be taken to “flatten the curve” of COVID-19 and save people’s lives. That must always be our No. 1 priority. But COVID-19 has economic impacts, too. Millions of workers and business owners are in danger of losing their livelihoods.
We must take swift economic action to help them – to flatten the curve of a looming recession so it doesn’t turn into a depression.
But if we hope to succeed, these actions can’t be reserved for airlines, banks and other high-visibility industries. America’s 30 million small businesses must be included, too.
Small businesses, which employ almost half the nation’s private workforce, will be the hardest hit by COVID-19’s economic shockwave.
Your local restaurant, hardware store, corner bar, independent grocery store, or hair salon will lose a huge portion of their customer base as people heed public health warnings. Some may have to close their doors completely for weeks or months.
If these businesses go under, we lose a critical part of our national identity. We will also lose our best hope of putting millions of people back to work quickly after a spike in unemployment that could reach depression levels, at least temporarily.
Here are some ideas to tackle the immediate crisis of liquidity facing small businesses and get them ready to bounce back stronger than ever when the COVID-19 emergency is over. Each idea has pros and cons, but they should be refined and urgently implemented to jump-start our economic response to the crisis.
READ: Colorado Sun opinion columnists.
First, we must preserve cashflow for small businesses to pay workers and cover operating expenses. Federal, state and local governments should all extend deadlines for 2019 tax payments into the summer for small businesses and businesses that have been hit particularly hard. This isn’t just a federal move – state governments with an income tax (like Colorado) should strongly consider this as well.
The federal government should also suspend quarterly payments by businesses to the IRS, and immediately refund quarterly payments it already received for the duration of this public health emergency.
COVID-19 IN COLORADO
The latest from the coronavirus outbreak in Colorado:
- MAP: Cases and deaths in Colorado.
- TESTING: Here’s where to find a community testing site. The state is now encouraging anyone with symptoms to get tested.
- VACCINE HOTLINE: Get up-to-date information.
We can also supply short-term loans to small businesses through the Small Business Administration to preserve cash flow without the burden of high interest rates.
Next, we must ensure small businesses have the capital they need to come roaring back once the crisis is over and consumers unleash months of pent-up demand. We can do this through smart tax policies, such as a tax deduction for paid sick leave provided during the COVID-19 crisis. For businesses forced to close, the tax credit should be refundable.
Likewise, suspending payroll taxes for employees and employers for the duration of the federally declared public health emergency will keep as much money as possible in the hands of small businesses and their customers.
Additionally, we should work with the mortgage industry to offer short-term reductions in monthly mortgage payments to at-risk low- and middle-income homeowners.
These reductions could be funded by a short extension in the overall life of the loan. Making sure this pandemic doesn’t trigger a sudden round of foreclosures is emphatically in our national (and local) interest.
This is not a handout or some special interest giveaway – it’s enlightened self-interest and basic fairness to small business owners. They are pillars of our local communities, who have created jobs, who have taken risks to start and grow their businesses, and who have paid taxes for years.
With measures like these, businesses will be able to keep more workers on their payrolls and expand hiring more quickly after the crisis passes, injecting more money into local economies.
These businesses have no desire to lay anyone off or close their doors. Helping them stay afloat will help the country as a whole emerge strong from the COVID-19 crisis.
I am glad to see national leaders are already taking steps in the right direction. The deadline for $300 billion in tax payments to the IRS has been pushed back by three months to July, and work continues on an $850 billion stimulus package, in addition to an earlier $100 billion COVID-19 response package that’s also working its way through Congress.
The $100 billion COVID-19 response bill has received pushback from some Republicans because of new mandates it would impose for paid sick leave. Some Democrats, on the other hand, have similarly questioned the idea of suspending payroll taxes.
I respect these concerns, but this is a time for national unity and action – not endless debate. This is the greatest test we have faced as a country since the 9/11 terrorist attacks, and just as we worked together then, we must work together now.
And as we forge ahead, we cannot leave our small businesses behind. They are essential to the economy and to the character of our local communities and our nation.
Kent Thiry is the former CEO of DaVita, Inc. and a civic activist who authored voter-approved gerrymandering reform and open primaries initiatives in Colorado.