Bernie Marcus, the co-founder of Job Creators Network and the retired co-founder of The Home Depot, writes in an op-ed in the Hill that the Republican tax bill will provide small businesses with much-needed relief.
From his op-ed in the Hill:
At the moment, small businesses, the vast majority of which pay tax at individual rates, face a marginal federal tax burden of 39.6 percent. When state and local taxes are factored in, this figure can rise to 50 percent. This puts small businesses at a competitive disadvantage with their big business and international competitors, whose tax burdens are much lower.
Partially as a result of years of overtaxation, American small businesses — like the communities where they locate — have not recovered from the Great Recession. New business formation remains at historic lows. Boarded-up shops dot Main Streets throughout the country. I believe that if The Home Depot started today, overtaxation would have prevented it from achieving its current success.
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The House and Senate bills differ in the avenues they take to arrive at small-business tax relief. The House bill creates a separate small-business tax rate structure. It lowers the top marginal rate on small businesses to 25 percent. And for small businesses that earn a maximum of $150,000 a year, it lowers their tax rate to just 9 percent on their first $75,000 of earned income.
In lieu of a separate small-business rate structure, the Senate bill calls for a 17.4 percent business income deduction. This means that a business with $200,000 of taxable income will only have to pay tax on $165,200, accruing the other $34,800 tax-free.
Read the rest here.
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