The Republican tax bill recently passed by the Senate has proven to be the subject of substantial debate. Business owners in particular are wondering how this will affect them. Supporters of the tax bill claim that it will provide a boost for businesses, while opponents say it will only benefit the wealthiest, biggest corporations.
The Size And Type Of Business Is Likely To Make A Big Difference
It is clear that the proposed tax plan would dramatically cut the corporate tax rate, benefiting big businesses. However, supporters of the plan also say it is designed to help out small, local businesses.
The proposed tax plan is designed specifically to benefit pass-through businesses by allowing them to protect a certain percentage of their income from taxation. Pass-through businesses are businesses that file as individuals, rather than using the corporate tax code. While this includes many small, local businesses, an article from the Atlantic debunking the myths about the bill also points out that it includes hedge funds, investment businesses and the like. In other words, the benefits might be seen primarily by the wealthy.
It is important to note that, while the Senate passed the bill, it did so just barely. The Republican tax bill still has a ways to go before it becomes law, and there may be many changes to come, especially considering the differences between the House and Senate versions. Whatever happens, owners of businesses of all sizes will want to watch carefully to see how this is going to impact them. New businesses may want to take particular care in choice of entity in relation to the proposed tax changes.