The primary question in every presidential election is whether individuals are better off compared to four years ago. Unfortunately, many salons, barbershops, and spas are not faring well.

The beauty industry, where both of us are employed, suffered greatly due to the pandemic. We were the first to close and the last to reopen. Many fellow small business owners did not survive, and those still operational are facing ongoing difficulties.

Handling the challenges brought about by the pandemic is already tough, but salons, barbershops, and spas are also dealing with unfair tax burdens not experienced by other industries where employees receive tips.

Back in 1993, Congress passed a law enabling restaurants to claim a tip tax credit when calculating the required employer portion of FICA taxes on tips received by employees from customers. Despite being the second-highest tipped industry after restaurants, the beauty sector is still treated unfairly in terms of taxes.

The upcoming election is being closely monitored by us and fellow small business owners as politicians talk about slogans such as “no taxes on tips.” The discussion surrounding such a policy is expected on Capitol Hill next year, particularly as addressing expiring tax cuts is a guaranteed piece of legislation to be voted on. Meanwhile, salon, barbershop, and spa owners are puzzled as to why Congress has not taken action on a bill that could truly benefit tens of thousands of small businesses nationwide.

The bipartisan Small Business Tax Fairness and Compliance Simplification Act is legislation that directly benefits women, minorities, and small business owners while also reducing the tax gap and enhancing compliance in tip reporting. This act would finally put the beauty industry on an equal tax footing with restaurants. We are pleased that our representatives in Congress, Rep. Darin LaHood (R-Ill.) and Rep. Lloyd Smucker (R-Pa.), are staunch advocates for rectifying this unfair treatment, recognizing the importance of the beauty industry to both the economy and communities.

Although seemingly small, these additional tax burdens can accumulate rapidly. For instance, a $20 tip for a haircut will end up costing the salon owner an extra $2 after federal payroll tax (7.65 percent), state unemployment taxes, and credit card fees are included. These taxes and fees apply to income that the business does not actually receive, as the tips go to the employees.

By multiplying the additional costs paid by salon owners by the thousands of haircuts given each year, one can see the unjust burden placed on the over 100,000 salons, barbershops, and spas nationwide, with over 80 percent employing fewer than 10 workers.

Rectifying this inequitable exclusion for salons, barbershops, and spas will inject money back into their businesses, enabling them to hire more staff, offer benefits like 401Ks, purchase new equipment, or make improvements to their establishments.

The beauty industry plays a crucial role in economic activity and is a significant part of our communities. Employing 1.3 million professionals, with 85 percent being women and 40 percent being Black, Hispanic, or Asian, the industry consists of skilled stylists, barbers, cosmetologists, nail technicians, estheticians, and massage therapists. What makes this industry unique are the lasting relationships and personal connections developed with clients over the years.

While we are grateful for the support of LaHood, Smucker, and the numerous cosponsors of this legislation in the House and Senate, we urge all members of Congress to stand up for small businesses. We are not seeking special treatment, just fair treatment similar to that of the restaurant industry.

In today’s political climate, bipartisan victories are rare. It is time for Congress to level the playing field for tip-based industries by passing the Small Business Tax Fairness and Compliance Simplification Act.