Telephone town hall on tax reform for small businesses to take place December 20
On December 19 and the early morning hours of December 20, Republican lawmakers were able to pass their signature — and controversial — $1.5 trillion tax reform legislation in both the U.S. House of Representatives and the U.S. Senate within a 24-hour period. The House and Senate voted along party lines.
However, the Senate parliamentarian found that three small provisions of the bill violated budget rules, so last-minute changes were made to the Senate version, as reported by the New York Times. This meant the House had to vote on and pass the bill again, which it did by a count of 224 to 201 on the afternoon of Wednesday, December 20.
While Republicans hailed the tax reform bill, Democrats and many small business owners called the bill a giveaway to big business.
As of press time, it was still unclear when President Trump would sign the bill into law.
To help small business owners make sense of the legislation, Businesses for Responsible Tax Reform (BRTR) will host a telephone town hall on Wednesday, December 20, at 8:00 p.m. EST (5:00 p.m. PST) to discuss the ways the GOP’s tax reform bill will impact Main Street businesses and answer questions from participants. The speed of the legislative process has made it difficult for anyone but tax experts to decipher what impact the final bill will have on small business owners. The telephone town hall will give booksellers a crucial opportunity to ask questions about tax reform relative to their business.
Booksellers can register for the telephone town hall here.
“While I know how busy booksellers are right now, I do hope our bookstore members will take advantage of this free town hall on tax reform,” said ABA Director of Public Policy and Advocacy David Grogan. “It will provide booksellers with crucial information about tax reform, as well as an opportunity to ask questions of tax policy experts.”
According to an analysis by the Tax Policy Center, taxes would decrease for all income groups on average in 2018, increasing overall average after-tax income by 2.2 percent. However, in 2027, the overall tax reduction would be just 0.2 percent of after-tax income, the analysis noted. Compared to current tax law, in 10 years, low- and middle-income taxpayers would see “little change and taxpayers in the top 1 percent would receive an average tax cut of 0.9 percent of after-tax income.”
The Tax Foundation predicts the plan will significantly lower marginal tax rates and the cost of capital, which would lead to a 1.7 percent increase in GDP over the long term, 1.5 percent higher wages, and an additional 339,000 full-time equivalent jobs. The Foundation expects the tax plan to bring in an additional $600 billion in federal revenues from economic growth.
As for small businesses, according to Inc., pass-through entities may be able to deduct up to 20 percent of income. The credits are temporary, however, and expire after 2025.
In addition, the tax bill now eliminates the mandate that all citizens have health care.
While Republicans hailed tax reform as it nears the finish line, Democrats expressed their displeasure with the bill and the speed of the process. Representative Nancy Pelosi of California, the House Democratic leader, told the New York Times that the bill “is simply theft — monumental, brazen theft from the American middle class and from every person who aspires to reach it.”
“Today, Congress disregarded the economic well-being of America’s 30 million small business owners in favor of an epic and fiscally irresponsible giveaway to large corporations,” said Ron Busby, Businesses for Responsible Tax Reform co-chair and president and CEO of the Black Chambers, Inc. “At the heart of the GOP’s tax bill is an enormous tax cut for corporations that does little to help small business owners who drive our economy by creating jobs and providing vital services to our communities.”
Busby also noted that, while the tax reform bill would increase the deficit, it also does nothing to simplify the tax code. “The new rules will mire the 90 percent of small businesses that organize their firms as pass-through entities in a byzantine and bewildering tax code that costs time and money to figure out — further tilting the playing field in favor of large corporations that can afford armies of accountants to search out every loophole and advantage. This bill is a complete failure for our Main Street small businesses,” he said.
According to the New York Times, the “parliamentary stumble” that necessitated the second House vote involved a provision that would have let people use 529 savings accounts for homeschooling expenses, and part of the criteria used to determine if colleges and universities are subject to an excise tax imposed on their investment income. The parliamentarian also ruled against the name of the bill because the provision that created the name did not influence spending or revenue, the Times noted.