AWMA Joins in Support of Legislation To Provide Small Business Tax Cut
A bill to be introduced in the U.S. House of Representatives this week would provide a 20% small business tax cut to allow small business owners to retain more capital, invest in their businesses and create more jobs.
Under the new legislation, small businesses would be allowed to exclude 20% of their income from taxes irrespective of how they are organized. As an example, a small business that under current law would pay a 30% federal tax on $100 of income would pay a $30 tax bill.
However, under this new House Republican proposal, the same small business would be able to exclude 20% of their income from tax (20% of $100 = $20). This small business would then pay the same 30% tax on the remaining $80 – resulting in a $24 tax bill – for a savings of $6 in federal taxes.
The reasoning behind this new bill is clear – the best way to boost economic growth and get people back to work is through small business growth. Over the past 17 years, small businesses with 500 or fewer employees have generated 65% of the new jobs in this country. The U.S. Small Business Administration study shows that small businesses represent 99.9% of the 27.5 million businesses in America and employ about half of all private sector employees. It’s time to recognize the vital role our small businessmen and women play in our economy and give them the tools they need to further stimulate real economic recovery.
“AWMA is happy to comply with a request by the U.S. House of Representatives Majority Whip’s office to support this measure which will benefit so many of our AWMA members,” said AWMA Vice President, Government Affairs, Anne Holloway.