Tax reliefcan be a boon for small business owners but challenges lay ahead.
Today’s small business owners who have survived the worst recession of our lifetime learned how to be more nimble, more creative and do more with less.
While the cost of capital became very attractive the bar to qualify for capital put it out of reach for many. It remained unachievable to expand and certainly a major challenge for start-ups.
The primary driver of the economy due to their shear numbers continue to be the small business owner. The steadily improving economy small business owner expectations are rebounding, but they need a boost. Tax reform which hasn’t been visited in three decades may be that relief, the boost many small business owners have sought.
With the first 100 days of the Trump administration quickly approaching the primary objective is to put points on the board. While executive orders have come fast and furious legislation is the true yardstick.
First on the legislative agenda was healthcare which directly impacts the other two major legislative challenges, the budget and tax reform. Even though healthcare stalled in the House the Trump administration moved forward with a proposed budget. .
Briefing with Secretary of the Treasury Steven Mnuchin and National Economic Director Gary Cohn
On Wednesday Secretary of the Treasury Steven T. Mnuchin and National Economic Director Gary Cohn announced a tax reform plan which includes a business tax rate of 15%. It’s the shot in the arm for small businesses were hoping for, but challenges remain…the impact on the budget deficit and individual opening S Corps to game the system.
At a White House press conference Mr. Mnuchin announced the tax reform plan and said “We want to move as fast as we can,” he declared “This bill is about creating economic growth and jobs.” He also noted it would be “the biggest tax cut and the largest tax reform in the history of our country,” “This bill is about creating economic growth and jobs.”
“The goal is to make it permanent, but there’s lots of levers here,” Mr. Mnuchin said. “If we have them for 10 years, that’s better than nothing.”
Beyond cutting the tax rate to 15 percent for large corporations, which now pay a rate of 35 percent, Mr. Trump also wants that rate for a broad range of firms known as pass-through entities — including hedge funds, real estate concerns like Mr. Trump’s and large partnerships — that currently pay taxes at individual rates, which top off at 39.6 percent
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