In short: the recently-passed Republican tax plan gives breaks to small business owners, meaning they, their employees, and the American economy can reap the benefits.
The evidence is clear: the Tax Cuts and Jobs Act significantly lowers tax burdens for small business owners compared to the current tax code. For the nearly 30 million small businesses that employ 60 million workers – roughly half of the U.S. workforce – this is huge.
Moreover, it’s estimated that over the next decade, the Tax Cuts and Jobs Act would create an estimated 890,000 new jobs and boost middle-class incomes by nearly $2,300.
As one small business owner puts it:
It’s too early for small business owners to breathe a sigh of relief, but momentum is on our side. The Tax Cuts and Jobs Act would slash the tax burden on small businesses like mine from 39.6 percent to a much more manageable 25 percent.
Under the current tax code, many small businesses are taxed at the top individual rate, which can reach 50 percent of business income when state and local taxes are accounted for.
The House tax plan would also allow for immediate expensing, ensuring that small business owners can write off the total cost of a business expense in a given tax year instead of spreading tax savings out over numerous years with a depreciation schedule.
Lower tax rates for America’s small businesses mean more money for businesses to put toward employee wages, recycle into capital, reinvest into the American economy, and more.
Sounds like a win for everyone.