Biden is blown away for breaking his election promise not to raise taxes on small businesses: A new tax will affect 1.9 million businesses and see the taxation of people inheriting businesses from their loved ones taxed
- During the campaign, Biden was asked if it would raise taxes on small businesses
- On 20 February 2020 he said: ‘No. Small business taxes will not increase’
- Next week House Democrats will vote on the framework for the tax hikes
- Biden wants to raise the marginal rate of income tax above 39.6 PC, by 37%
- Americans for tax reform estimate that 1.9 million small businesses will be affected
- In addition, Biden plans to eliminate an “increase” based on the inherited property
- The rule means that the person who inherits the property can sell it immediately without paying any capital gains tax, a loophole that Biden wants to eliminate.
Joe Biden plans to raise taxes levied on small businesses, while explicitly promising he won’t in the campaign year.
The White House proposal, backed by the president himself, will begin to make its way to Congress next week.
Last week the Senate passed a $ 3.5 trillion budget resolution that would pave the way for legislation based on Biden’s plans, and the Democratic-majority House is expected to vote on the budget resolution next week. that is, it will surely be approved.
The scheme will see how the higher marginal tax rate will increase from 37% to 39.6%. A marginal tax rate is the additional amount of tax paid for every dollar of income over a previous tax bracket.
Joe Biden, seen on Friday, pledged in the campaign not to raise taxes on small businesses, although his new plan will increase 1.9 million
The think tank Americans For Tax Reform estimated that 1.9 million small businesses will be affected.
Most are small business owners who run their businesses as C corporations. They are entities separate from the finances of their owners and protect their owners from any personal liability in the event of their businesses failing.
Biden wants C-corps to be affected by a 7% tax jump, going from the current rate of 21% to 28%.
Biden was asked directly about the trail of the campaign, in its Feb. 20, 2020 debate with Donald Trump, whether to raise taxes on small businesses.
Hallie Jackson of MSNBC said, “I want to ask you about Latinos who own one in four new small businesses in the United States. Many of them have benefited from President Trump’s tax cuts and may be hesitant. on new taxes or regulations Will your small business taxes increase under your administration?
Biden replied, “No. Small business taxes will not increase.
Small businesses, represented in San Francisco in April, have suffered enormously during the pandemic. Now many of them are facing an increase in their tax burden
On Thursday, the administration defended the change of direction, insisting that the tax hike was necessary.
“President Biden’s small business agenda is more than helping companies get to the other side of this crisis,” said Wally Adeyemo, deputy secretary of the Treasury.
“It’s about rebuilding better and creating a fair economy for all Americans.”
The administration also said 3.9 million small business owners would receive tax cuts under Biden’s proposals to extend child tax credit extensions and affordable Act subsidies included to the president’s coronavirus relief law.
Biden appears with House Speaker Nancy Pelosi on June 30th. Pelosi will begin directing the budget conciliation plan next week through the House, which will pave the way for tax increases
Americans for tax reform also noted that small business owners would be affected by a plan to remove the so-called “step-up in base” rule from inheritance tax.
Under the current agreement, people who inherit from their relatives can sell the asset without paying capital gains tax.
Biden plans to get rid of the deal.
Robert W. Wood, a tax attorney, wrote to Forbes: “Under current tax law, property that passes directly to your heirs gets a basic extension for income tax purposes.
‘It doesn’t matter if you pay property taxes when you die or not.
“For generations, assets held at death get an intensified base (at market value) when they die.
“Small businesses count on that.”