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.
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.