Congress Looking at a 3.8% Tax for Small Business

Democrats in the U.S. Senate — led by Oregon Sen. Ron Wyden — are looking at taxing pass-through businesses an additional 3.8%. The bill — if it passes the Senate and then the House — will impact individuals making $400,000 a year and couples with income topping $500,000.

Wyden called the current way pass-through businesses are taxed — from the 2017 tax reform bill — a Republican giveaway to the top 1% income earners.

“Half the benefit of the pass-through deduction goes to millionaires, and because the benefit is so skewed toward the top, many Main Street small business owners are excluded,” Wyden said when he introduced his bill. “The mega-millionaires get to write-off 20 percent of their income while middle-class accountants are cut out. This makes no sense, and my bill would overhaul the deduction to ensure its benefitting Main Street small businesses.”

The senator calls the bill a “win-win” and says it will make the policy more fair and less complex for middle-class business owners.

Right now the hold up is negotiations between West Virginia Democrat, Sen. Joe Manchin and Senate Majority Leader Chuck Schumer and Republicans in the Senate. It’s highly unlikely Schumer will get many GOP members on board.

The tax — it is said — will be used to shore up Medicare as it applies to the elderly and disabled, a will be invested into child care programs and education. 

Source link: Reuters — https://reut.rs/3RxEvps

Source link: Senate Committee on Finance — https://bit.ly/3nZ1v2O

Source link: Oregon Catalyst — https://bit.ly/3aEjad3