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Joe Biden wants to raise taxes on small businesses, despite the fact that he made a clear campaign promise not to do so.
The White House proposal, backed by the President himself, will be passed in Congress next week.
The Senate passed a $ 3.5 trillion budget decision last week that paves the way for Biden’s proposed legislation, which means the Democratic majority will vote in favor of next week’s budget decision, which will almost certainly be passed. Do.
According to this system, the maximum marginal tax rate will be increased from 37% to 39.6%. The marginal tax rate is an additional tax paid for every $ 1 of income that exceeds the previous tax rate.
Joe Biden promised on Friday not to raise taxes for small businesses on the way to the campaign – nevertheless, his new plan calls for an increase of 1.9 million.
The Americans for Tax Reform Council think tank has calculated that 1.9 million SMEs will be affected.
Most are small business owners who conduct their business as C companies. They are segregated from the owner’s finances and protect the owner from personal liability in the event of a business failure.
Biden hopes C-Corp will be affected by a 7% federal tax hike from the current 21% to 28%.
In the course of the election campaign on February 20, 2020, in a conversation with Donald Trump, Biden was asked directly by small companies whether taxes would rise.
MSNBC’s Harry Jackson said: Many of them have benefited from President Trump’s tax cuts and may be hesitant about new taxes and regulations. Will taxes increase on your small businesses under your control? “
Biden replied, “No. Taxes for SMEs will not be increased. “
A small business filmed in San Francisco in April was badly damaged during a pandemic. Many of them are now faced with an increase in their tax burden
On Thursday, the government defended the U-turn, insisting that a tax hike was necessary.
“President Biden’s SME agenda is not just helping companies reach the other side of the crisis,” said Deputy Treasury Secretary Wally Adeyemo.
“It’s about building better and creating a fair economy for all Americans.”
The government is also under Biden’s proposal that 3.9 million small business owners will expand the expansion of child tax credits and affordable subsidies to the Care Act, which are included in the President’s Coronavirus Rescue Act. He said he would get a tax cut.
Biden was portrayed with House Speaker Nancy Pelosi on June 30th. Next week, Pelosi will begin running a budget adjustment plan through the House of Representatives. This paves the way for tax increases.
The American Tax Reform Council also indicated that small business owners will be affected by plans to abolish the so-called “basic step-up” rule of inheritance tax.
The current regime allows heirs to relatives to sell their property without paying capital gains tax.
Biden wants to give up the deal.
Robert W., tax attorney. Wood wrote in Forbes: “Under current tax law, assets passed directly to heirs are increased for income tax purposes.
“It doesn’t matter if you pay inheritance tax when you die.
“For generations, wealth at the time of death has gradually increased to market value when you die.
“The middle class is dependent on it.”