1/ The next time the GOP says they are fighting for small business, know that’s a lie. They had an opportunity to prove their #smallbiz commitment & do right by entrepreneurs and small biz owners- the backbone of our economy- and punted.
2/ Private equity professionals, who earn $$ of off investing others’ capital will keep low “carried interest” tax rates, but professional service providers that own their own businesses & risk THEIR OWN CAPITAL w no guarantees at all, get higher ordinary income tax rates.
3/This isn’t a dig at PE- I think the less $ the govt gets the better- but in what universe does a private equity professional deserve a lower tax rate than accountants, lawyers, consultants, IT service providers, etc. that are business owners?
4/Both the House & Senate have said big corporate gets a break, PE keeps a break, but if you are one of the millions of small biz owners that creates jobs through providing services or is in a solo practice, you don’t count enough to get a full break- or in many cases- any break.
5/The “explanation” is that they don’t want rich people to abuse the small biz rate & make deals with employers to re-categorize them as business owners to pay less taxes. This is so absurd for many reasons.
6/First, state and federal rules say who can be an employee and who can be a contractor with strict guidelines (which are too strict, IMO). Even if you are a freelancer or biz, certain laws make you still get categorized as employee by how you perform work.
7/Second, self-employed/pass-through business have to pay self-employment taxes, which means you pay the employer portion of your "social security" tax as well as your own. Unless I missed a provision that repealed that, that’s a huge deterrent.
8/However, even if a few people were able to game the system, why would you care more about that then benefiting MILLIONS of small business owners? The “logic” is not logical in any way. It's throwing the pro-growth baby out with the bath water.
9/While the pledge was to make taxes simpler, not only do millions of small biz get 0 biz breaks, but millions more will have to jump through hoops to figure out what portion of their income is really salary, what counts for a break, what doesn’t. It’s even more of a time waster
10/ Small biz is the backbone of our economy. They are making the majority of new hires. They account for the majority of sales. They have the best opportunity to impact the economy vs. big corps who will distribute a lot of the tax savings back to shareholders.
11/While lowering the corp tax rate is important for competitiveness, millions of #smallbiz should not be left behind. Let your senators/reps know that this is not ok and that you support small business being on the same playing field as PE & big biz. Pro smallbiz = pro growth
