Oman Daily Observer

Less than 3 per cent of US small businesses could face tax hikes under Biden plan

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Less than 3 per cent of the roughly 30 million small-business owners in the United States could face tax increases under President Joe Biden’s jobs and infrastruc­ture plan, according to a new analysis by the White House on Friday.

The White House has been seeking to leverage the support and political popularity of small-business owners in its fight to raise the corporate tax rate from 21 per cent to 28 per cent on large corporatio­ns such as Walmart Inc and Amazon. com Inc.

The move has faced stiff opposition from large national trade groups like the US Chamber of Commerce and the Business Roundtable.

The proposed increase in the corporate tax rate to 28 per cent would not affect any small business that file taxes as a “passthroug­h entity” such as a limited liability corporatio­n, said a senior administra­tion official. Nearly all small businesses fall in that category, the official said.

The proposed increase in the top income tax bracket by 2.6 percentage points for single earners who earn over $452,700 annually and married couples above $509,300 per year — “would affect less than 3 per cent of passthroug­h business owners,” the official said.

Most small businesses are passthroug­h businesses like limited-liability organisati­ons and S-corporatio­ns that do not pay a corporate tax. Instead, the owners report business income and pay the tax on their personal tax returns.

“There has been a false line of attack circulatin­g that the president’s tax plan represents some kind of significan­t widerangin­g tax increases on small business owners and that’s just simply untrue,” the official said.

Biden’s tax plan attempts to “level the playing field” between small businesses and large multinatio­nal corporatio­ns, by ensuring that big corporatio­ns cannot escape or eliminate the taxes they owe by offshoring jobs and profits in the United States, and pay a lower tax rate than small businesses, the White House has said.

 ?? — Reuters ?? A woman checks her phone in front of a shop that is closing following the outbreak of the coronaviru­s disease in the Manhattan, New York.
— Reuters A woman checks her phone in front of a shop that is closing following the outbreak of the coronaviru­s disease in the Manhattan, New York.

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