As he nears his 100th day in office, President Donald Trump is set to outline a highly-anticipated tax reform plan Wednesday. The tax blueprint proposes a massive cut for business taxes and a significant increase in the standard deduction on tax returns, according to officials. Small business owners, who have remained optimistic since the election, are hopeful that Trump’s business-friendly policies will mean big savings for their businesses.
According to Treasury Secretary Steve Mnuchin, Trump’s plan would cut the tax rate for corporations from 35 percent down to 15 percent and reduce the top tax rate for pass-through entities, which includes small businesses that currently pay through the income tax code, from 39.6 percent to 15 percent. Mnuchin called the plan “the biggest tax cut” in U.S. history.
“There’s multiple ways of doing this and the president is determined that we will have tax reform,” Mnuchin said. “We are committed that small business owner-operators will have the benefit of the business rate. What this is not going to be is a loophole to let rich people who should be paying higher rates pay 15 percent.”
While surveys show small business owners are optimistic about the promise of big policy changes under the Trump administration, the optimism hasn’t translated into increased hiring or spending. According to the National Small Business Association, nearly one-third of business owners say they believe comprehensive tax reform will never be enacted, and more than one-quarter said they are unsure if it will ever come to fruition.
“Some of the president’s executive orders have been outstanding, that’s all great, but it isn’t enough. If optimism is to be sustained, small business needs a sense of commitment from the White House to fix the tax system and repeal and replace Obamacare,” said Jack Mozloom, communications director of the National Federation of Independent Business.