You’ve probably heard a lot about tax reform in recent weeks. And for good reason: Taxes are crushing our small businesses.
Two-thirds of small business owners say that high taxes threaten the viability of their business. A new JPMorgan Chase study shows that small business expansion is negligible, as many small businesses—the backbone of the U.S. economy—”operate on a tight budget and essentially live month-to-month.” As JCN President and CEO Alfredo Ortiz recently wrote in The Hill, “Tax reform must be broader than just focusing on the country’s anti-competitive corporate tax rate—it must focus on providing relief for America’s 28 million small businesses and the 85 million Americans who owe their livelihoods to them.
Fortunately, Congress just introduced a solution. It’s called the Bring Small Businesses Back Tax Reform Act, a new bill introduced by Reps. Rand Hultgren (IL) and Jason Smith (MO) and supported by JCN. What does it do? Here are the major provisions:
- Lower the tax rate for small businesses’ first $150,000 of income to 12 percent and to 25 percent for all income above that threshold.
- Allow small businesses to immediately expense all investment in equipment.
- Permit small businesses to defer income declaration until payment is actually received.
These provisions make it easier for small businesses to build additional facilities and hire new employees. How? They reduce the tax burden on small businesses in their earliest days, when they’re trying to get off the ground and expand. The Bring Small Businesses Back Tax Reform Act encourages small business owners to invest in new equipment and grow the business to $150,000 in income and beyond.
Tax reform promotes job creation and helps the 85 million Americans who depend on small business.