As President-elect, Donald Trump will soon have the opportunity to put his tax reform policies into place. Here’s how they could affect small businesses.
President-elect Donald Trump has offered a few versions of his tax vision en route to winning the White House. So just what can owners expect?
From Seven to Three
Trump said throughout his campaign that he would reduce the number of tax brackets from seven to three, “with nobody paying more than 33% in income taxes,” according to Forbes. He’s also “promised to reduce the business tax rate to 15 percent for businesses, both small and large, that want to retain the profits within the business.”
Small businesses will be interested to know that Trump originally called to apply the 15 percent rate to pass-through income, “the kind earned by most small businesses.” However, he has since released a revised tax plan that doesn’t include the pass-through income, so only time will tell which direction he chooses.
Goodbye, Estate Tax
Both Trump and House Speaker Paul Ryan are hoping to eliminate the estate tax. However, Trump “would enact taxes on capital gains at death,” according to The Daily Caller.
An Urgent Plea
Others are seeing this as a golden opportunity for reform. Rep. Vern Buchanan, who sits on the U.S. House Ways and Means Committee, wrote a letter to Ryan and Senate Majority Leader Mitch McConnell, urging them to reform the tax code in light of Trump’s victory, Sunshine State News reports.
“The [current] tax code punishes ordinary Americans and suffocates business growth,” Buchanan wrote. “It’s time to fix the economy by simplifying the tax code and reducing rates on individuals and businesses. People have been looking at their bank account balance with a knot in their stomach for too long.”
Note: This news coverage does not equate to an endorsement of any candidate by NFIB.
Photo credit: Gage Skidmore