Tax Reform 2.0 Doubles Down on Ineffective Small Business Policy
Statement from Small Business Majority Founder & CEO John Arensmeyer on why the tax legislation passed by the U.S. House of Representatives today offers little savings for small businesses
The tax bill approved today by the U.S. House of Representatives is extremely disappointing because it shows lawmakers are all-too willing to double down on the same problems found in the first round of tax cuts enacted last year. On top of the $1.5 trillion this country will spend on the 2017 tax cuts, making those cuts permanent through this latest round of legislation would cost another $657 billion over the next decade, an enormous amount of money to give up for almost no benefit to most of America’s Main Street small businesses.
As with last year’s tax cuts, Tax Reform 2.0’s treatment of pass-through entities gives the bulk of the benefit to the wealthiest pass-throughs, rather than to Main Street. According to the Joint Committee on Taxation, more than half of the 2018 tax reduction benefit will go to the top 2.3 percent of pass-through firms, and by 2024 that percentage drops to one percent. By our calculations, a business owner earning $600,000 per year (after standard and personal deductions) would save 26 times that of an owner with $75,000 in income, despite only earning eight times more. This legislation may be called the “Protecting Family and Small Business Tax Cut Act,” but making the first round of tax cuts permanent with this bill would actually do very little to help the vast majority of small firms.
Small Business Majority’s scientific opinion polling has shown small business owners are more concerned with making our tax system fair than seeing their tax obligations reduced, and 7 in 10 small business owners agree it’s important that tax cuts do not cause an increase in the federal deficit. What’s more, small business owners rate healthcare costs, not taxes, as their primary concern.
Our country’s largest companies and wealthiest individuals don’t need yet another tax break. Instead, we need a fair tax system that benefits the millions of American entrepreneurs who are focused on growing their enterprises and making payroll at the end of each month.
About Small Business Majority
Small Business Majoritywas founded and is run by small business owners to ensure America’s entrepreneurs are a key part of a thriving and inclusive economy. We actively engage our network of more than 58,000 small business owners in support of public policy solutions and deliver information and resources to entrepreneurs that promote small business growth. Our extensive scientific polling, focus groups and economic research help us educate and inform policymakers, the media and other stakeholders about key issues impacting small businesses and freelancers. Learn more about us on our website and follow us on Twitter, Facebook and Instagram.