Small Businesses to Face Biggest Tax Increase in Years Under Vice President Biden's Tax Proposals Reports Bambridge Accountants New York
NEW YORK, May 25, 2020 /PRNewswire/ -- Former Vice President Joe Biden, the presumptive Democratic nominee for president, plans to issue the biggest tax increase in years for small businesses report Bambridge Accountants New York.
The key policies of Vice President Biden's tax plans are:
- phase out the qualified business income deduction (QBI) for small companies
- leading to a major tax increase for small business
- employment levels would be lower
- raise corporate taxes to 28%
The effect would be to hinder entrepreneurship and reduce the funds available for business growth.
Alistair Bambridge, partner at Bambridge Accountants New York, asks: "Is this really what is needed as the economy tries to recover? When we should be encouraging corporations to add to the workforce and drive the economy, these tax plans reduce the ability and incentives for businesses to invest and expand."
In an interview with CNBC on Friday May 22, 2020, Vice President Biden also vowed to stick to his plan to raise corporate income tax from 21% to 28%.
That increase in corporate income tax would leave less funds available for wages for all households.
Vice President Biden vows not to increase taxes for anyone earning under $400,000 - but it is important to note that by repealing tax credits and raising corporate taxes, wages will be affected and all individuals will see a decrease in their net income.
The independent research organization, The Tax Foundation, has reviewed Vice President Biden's tax plans in detail and found that:
- taxes would be raised by $4 trillion over 10 years
- reduce Global Domestic Product (GDP) by 1.51%
- after-tax income for all individuals would be reduced
- loss of 585,000 jobs
After the Tax Cuts and Jobs Act 2017, 95% of individuals were better off or the same – under Vice President Biden's tax proposals, individuals in every income group would have less take-home pay.
The plan would reduce GDP by 1.51%, leading to lower employment, a loss of 585,000 jobs.
The current corporate tax rate is 21% and the proposal is to raise this to 28%. That rate would be one of the highest out of the larger and industrialized nations – higher than the European average (20.27%), China (25%) and the current North America average (25.85%).
President Trump's tax plans for 2020 and re-election have not been released in detail – the expected proposals are to include:
- reducing the income tax rate for individuals
- further reducing the corporate tax rate
- allowing for capitals gains to recognize inflation, so the tax on those capital gains is reduced
- extending and enhancing the estate tax provisions
Contact Alistair Bambridge, [email protected], +1 646 956 5566.
Bambridge Accountants has offices in London and New York, specializing in creatives and U.S. expats around the world.
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