Non-Partisan Report: Biden Tax Plan Means Lower Wages, Slower Economic Expansion, Fewer Jobs for Small Businesses
Small businesses were hit hard during the pandemic. Democrats’ plans for America’s tax code would add salt to the wound, according to a new non-partisan report.
The nonpartisan Tax Foundation found that the proposed Biden tax hikes would result in “the highest” tax rates since 1986.
The majority of small businesses pay taxes at individual rates. Biden’s plan would have dire consequences for these local job creators.
For those small business owners with more than $400,000 of income, the Biden-Harris tax plan would:
- Increase the tax rate to 39.6 percent (in some cases, this is a 7.6 percentage point increase).
- Eliminate the 20 percent small business income deduction.
- Restore the “Pease” limitation on itemized deductions (which has the effect of a 1.2 percent tax increase).
- Further limit itemized deductions by capping the benefit to 28 percent.
- Impose 12.4 percent Social Security tax on small business owners’ income above $400,000.
Small businesses are struggling to recover from the pandemic. The worst possible signal Washington could send is that confiscatory taxes are on the way, ranging from roughly half of each additional dollar earned, to upwards of 63 percent in some states.
Yet the Biden-Harris ticket and their allies in Congress seem oblivious to how a potential Biden-Harris administration tax hike under a Democrat-dominated Congress would harm on small businesses, their workers, and the unemployed Americans these small businesses may hope to hire.
Worse yet, there is no indication that a Biden-Harris administration would “hit pause” on tax hikes during the fragile recovery, as responses from the candidates have ranged from taxes being raised on “day one” (Harris) to, “Well, I’d have to get the votes” (Biden).
Small businesses should not pay a penalty as they struggle to become successful again, and Republicans are committed to protecting them from these crushing tax hikes.
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