Less than 3% of the roughly 30 million small business owners in the United States could face tax increases under President Joe Biden’s jobs and infrastructure plan, according to a new White House analysis released Friday.
The White House has been looking to harness the support and political popularity of small business owners in its fight to raise the corporate tax rate from 21% to 28% on large corporations such as Walmart Inc and Amazon.com Inc. it has faced strong opposition from large national business groups such as the US Chamber of Commerce and the Business Round Table.
The proposed increase in the corporate tax rate to 28% would not affect any small business that files taxes as a “pass-through entity,” such as a limited liability corporation, said a senior administration official. Almost all small businesses fall into that category, the official said.
The proposed increase in the top bracket of income tax by 2.6 percentage points for single wage earners who earn more than $ 452,700 a year and married couples above $ 509,300 a year, “would affect less than 3 percent of transfer business owners, ”said the official
Most small businesses are transfer companies, such as limited liability organizations and S-corporations that do not pay corporate taxes. Instead, homeowners report business income and pay the tax on their personal tax returns.
“A false line of attack has circulated that the resident’s tax plan represents some kind of significant, far-reaching tax increase for small business owners and that is simply untrue,” the official said.
Biden’s tax plan attempts to “level the playing field” between small businesses and large multinational corporations, ensuring that large corporations cannot escape or eliminate the taxes they owe by offshoring jobs and profits in the United States, and paying a lower tax rate than small ones. business, the White House has said.
The plan faces stiff opposition from Republican lawmakers who have shown little sign of being swayed by small business sentiment.
With information from Reuters and VOA.