In case you missed it, U.S. Senator Bernie Sanders, I-Vt., is the star of the latest viral meme sweeping the country, and the biggest costar in the photo is the pair of handcrafted mittens he’s sporting. In a photo taken at President Biden’s inauguration, Senator Sanders looks grumpy sitting in a folding chair with arms and legs crossed, wearing a bulky coat, and a now-iconic pair of mittens. Hopefully, you didn’t want a pair of mittens like Sanders’s, though, because taxes killed that business before it could take off.
Some may not have realized it, but this isn’t the first time this pair of mittens has garnered national attention. While on the campaign trail in December 2019, these mittens were noted when he loaned them to a Pittsburgh hospital worker while walking a morning in her shoes, when she mentioned her hands were cold. In January of 2020, these mittens became part of a joke for the first time when Sanders wore them during a women’s march in New Hampshire, with chatter about Sanders wearing oven mitts to keep warm in the New England winter circulating online.
These mittens were made by second-grade teacher Jen Ellis of Essex Junction, Vermont, and were given to Sanders as a gift in 2016. Ellis made the mittens by repurposing wool from unwanted sweaters. The mittens were gifts for teachers at the daycare center her daughter attended at the time and the center happens to be owned by one of Sanders’ relatives. Knowing the relationship between the owner and Sanders, Ellis made a pair for the Senator and asked the owner to deliver them for her.
Ellis also made these mittens to sell at craft fairs as a side business, but that side business no longer exists. According to Ellis, high taxes killed her business. In an interview with Slate she said, “People have been contacting me thinking that they can get mittens, and actually they can’t. I don’t have any more, and I don’t have much of a mitten business anymore because it really wasn’t worth it. Independent crafters get really taken for a ride by the federal government. We get taxed to the nth degree, and it wasn’t really worth it pursuing that as a business, even as a side hustle.”
Federal taxation is the reason Ellis mentioned for killing her business. State lawmakers must also consider the impact of high taxes; the state tax burden can add significantly to the total tax burden of a small business owner. While a small business owner leaving the country to pursue a business offshore is fairly unrealistic, leaving one state for another is common.
In terms of its corporate tax burden, the Tax Foundation ranks Iowa badly at 46th in the country due to Iowa’s high corporate tax rate on their 2021 State Business Tax Climate Index. Many small business owners utilize the individual income tax for their business’s taxes, though, and Iowa fairs only marginally better there, coming in at 40th in the country by that measure—well behind even the middle of the pack. For comparison, Vermont comes in at 44th on the corporate tax rankings and 39th on the individual income tax rankings, just ahead of Iowa.
State lawmakers should take note of this story. When confronted with high tax rates, some individuals may choose to leave, but many others will simply discontinue pursuit of a business altogether if they do stay. Governor Reynolds has called on the Iowa Legislature to remove the triggers from the 2018 tax bill that was passed in order to deliver Iowans promised tax relief. It’s time lawmakers answer that call and act.
Who knows what side business ventures will be saved by reducing the tax burden? We may not be able to predict which mittens may garner national attention—multiple times—and allow a side business to expand into the next big thing, but it is possible for lawmakers to help business ventures like that of Ellis survive and thrive in the right environment.
