Despite claims that the incoming tax proposal would protect small business owners from the tax rate increase, the Biden administration reportedly is planning to hike the corporate tax to 28%, at the same time pushing for an increase in the tax of capital gains and promoting a “Global Minimum Tax” causing upset to business advocates.
After COVID-induced impacts on the US market and economy, several businesses have been trying their best to recover from a year of operation shutdowns.
These new tax plans promoted by the government ultimately endanger new startups and ventures that are still in their infancy.
Higher taxes also risk small family businesses from not being able to let their ventures prosper in the long run as most of their profit would go to paying taxes.
Yet, according to the White House’s recently issued Fact Sheet on their tax plan, these campaigns sound better on paper. Raymond J. Keating, the Small Business and Entrepreneurship Council’s Chief Economist says that the administration’s claims that the tax increases would be beneficial to small business owners is ridiculous.
“It’s a bizarre fantasy that no one should take seriously,” he says. He also weighs in on the Global Minimum Tax and its potential targets: huge US technology firms.
“Hiking costs on large businesses will be a negative for the overall economy including small businesses,” Keating says.
He explains that small businesses are affected by these tax raises because not only are they customers of these large tech firms, but they also use the platforms they own to grow their businesses.
At this point, anyone can guess what would happen next about these tax rate increases. Hopefully, moves will be made which will ensure the protection of small business owners amidst these rocky tax issues.