- White House releases fact sheet on how it intends for its tax reforms and other programs to assist small businesses
- Increasing the corporate tax rate to 28 percent is a key part of the Biden administration’s agenda
- Some business groups have criticized the proposal, saying it will raise costs for smaller C-corps
Summary by Dirk Langeveld
The Biden administration has released a fact sheet arguing that its Build Back Better agenda will benefit the vast majority of small business owners if its tax reforms can be implemented.
The White House argues that the current tax code “disproportionately benefits multinational corporations and a financial system that prevents millions of entrepreneurs from obtaining sufficient capital to start and expand operations.” A Treasury Department analysis suggests that the administration’s changes will protect 97 percent of small businesses from income tax increases and cut taxes for more than 3.9 million entrepreneurs.
- A key change being pushed by the White House is an increase of the corporate tax rate from 21 percent to 28 percent, which would not affect LLCs, S-corps, and sole proprietorships
- Other proposals include strengthening the global minimum tax for large multinational corps; a 15 percent minimum tax on book income of “large, highly profitable corporations;” ramping up tax enforcement through the Internal Revenue Service; and cutting incentives that might push businesses to locate operations offshore
- In addition, the administration is proposing a new financing facility for small manufacturers, a grant program to assist minority-owned manufacturing firms, and more funding for the Small Business Administration’s 7(a) loan program
- The White House argues that small businesses can also benefit from other initiatives such as the expansion of the child tax credit, a federally funded paid leave program, improved access to federal contracting opportunities, and tax cuts for small businesses that buy health coverage through the Affordable Care Act marketplace
- The plan has received criticism from business groups such as the U.S. Chamber of Commerce and National Federation of Independent Business, which say it would raise taxes on smaller C-corps and create an additional burden for companies recovering from the COVID-19 pandemic
