The National Federation of Independent Business is pleased with the work done thus far by Congress on tax reform.
“This really is a once in a generation opportunity to get that kind of tax cut for small business,” said Juanita Duggan, President and CEO of NFIB. “The House and Senate have both passed bills. Both have significant tax cuts for small business. I think they’re going to be able to hammer out their differences this week, maybe the beginning of next week, and get a bill to the President that he can sign before the holidays.”
One of the groups that gains from the tax bill is pass-through entities.
“If you make $100,000 of taxable income and you pay your business income on your personal income tax, what’s called a pass-through entity, you’re going to get a savings as much as $5000 in the House bill and it’s going to be even bigger in the Senate bill,” said Duggan. “We don’t have that number yet, but it’s a significant tax cut for small businesses.”
There are many places small business owners can put that money that will be back in their pocket.
“Hiring folks, buying equipment, buying inventory, and hopefully, wages,” said Duggan. “They’ll be able to pay people more. Right now, we have a very tight labor market. This kind of tax cut will give the incentive to business owners to pay their people more. This is one of the best ways to jump-start the economy. Remember when President Reagan did this in 1986? It created 20 million new jobs over 10 years.”
Duggan said the experience of the Reagan tax cuts tells her that the economy can grow enough for the tax cut to pay for itself.