© Reuters. FILE PHOTO: US President Joe Biden holds the first Cabinet meeting at the White House in Washington, US, April 1, 2021. REUTERS / Tom Brenner
By Nandita Bose
WASHINGTON (Reuters) – Less than 3% of the estimated 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 on Friday.
The White House has sought to leverage the support and political popularity of small business owners in its fight to lower the corporate tax rate from 21% to 28% on large companies such as Walmart (NYSE 🙂 Inc and Amazon.com Inc (NASDAQ :). The move met with stiff opposition from major national trading groups like the US Chamber of Commerce and the Business Roundtable. https://reut.rs/3bpkKwQ
The proposed increase in the corporate tax rate to 28% would not affect any small business that files taxes as an ‘intermediary entity’ such as a limited liability company, a senior administration official said . Almost all small businesses fall into this category, the official said.
The proposed 2.6 percentage point increase in the top income tax bracket for singles earning more than $ 452,700 per year and married couples over $ 509,300 per year – “would affect less than $ 509,300 per year. 3% of mid-level business owners, ”the official said.
Most small businesses are intermediary businesses like LLCs and S corporations that do not pay corporate tax. Instead, owners report business income and pay tax on their personal tax returns.
“There has been a bogus line of attack circulating that the resident tax plan represents some kind of big tax hike on small business owners and it is simply not true,” the official said. .
Biden’s tax plan attempts to “level the playing field” between small businesses and large multinationals, ensuring that large corporations cannot evade or eliminate the taxes they owe by offshoring jobs and resources. profits in the United States, and pay a lower tax rate than small businesses, the White House said.
He faces stiff opposition from Republican lawmakers who have shown little sign of being swayed by small business sentiment.
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