In today’s climate, it is so difficult to understand what to do and who to trust. The Republicans say this and the Democrats want that but what does it all mean to us as small business owners? I will roll out some of the conversations that are circulating around not only during the discussions with the industry experts that I encountered during my Washington, D.C. trip but what others are saying including the media.
With the information that you will receive from this article, you will be able to make an educated decision as a business owner. To start off the conversation let’s consider what Donald Marron, Economic Policy Initiatives Institute Fellow & Director, Urban Institute stated during the Ensuring Tax Reform Promotes Small Business Success panel discussion, “Is It Spinach or Ice Cream?” Ice Cream is the soft sale in what we are hearing and seeing but in actuality, we are receiving and eating spinach. For most of us, spinach represents a food that we dislike, in this case, spinach displays what is truly going on.
So here we go pertaining to the proposed tax policy. The panel that Marron was a part of were full of financial, policy and tax industry experts, that provided us with a wealth of information. So the question really is, is it a tax reform or tax cut? The answers depend upon who you are asking.
Let’s look at a few tax issues that are being proposed and circulating:
- Doubling the standard deductions
- Tax credits for child dependent families, as well as, nondependent
- Reduction of corporate taxes
- New tax rate for pass-through taxes for small businesses
Here is how it rolls out according to the panelists:
The purpose of taxes is to provide the economic support that the Country needs to fund itself primarily for the well-being of the various social programs that our Country and its people need from transportation, Social Security and health care to education. Mark Mazur, Robert C. Pozen Director, Urban-Brookings Tax Policy Center, indicates that while the tax system worked in the 50s and 60s, in its current state it isn’t. Due to the economic shift that we are and have been experiencing for decades, our system needs some massaging.
The last tax reform was allegedly in 1986. According to @RepTomEmmer “Last time we had major tax reform, I was rocking the flannel look most days. Safe to say we need tax reform now: GOP Tax Reform https://fairandsimple.gop/.”
As a part of the changes, the state and local tax deductions will be eliminated but the standard deductions will be doubled. While this may be great for some states the states that will be hardest hit will be California and New York. One of the panelists, CPA Anne Zimmerman, Zimmerman & Co CPAs, Inc. ran one of President Trump’s prior year taxes and indicated that according to the new proposed tax laws if passed, he and the upper echelon will subsequently be paying nothing in taxes and instead will be gaining by a windfall.
While Trump initially thought that he would be able to immediately get his proposed tax bill passed, he is now weighing his options and hopefully, he will begin to see the error of his ways. Any tax bill being proposed should be for the people especially for those that voted for him based upon his promise to Make America Great Again. Is this new tax proposal Spinach or the Ice Cream?
Research, read and digest all of the information that you can to find and determine for yourself if this proposed tax bill will either Make America Great Again or will instead cripple us and take us back to the Stone Ages. Here are some suggestions to consider including those of the panelists:
- Wage credit – Ryan Abraham, Business & International Senior Tax Counsel, U.S. Senate Finance Committee
- Lower loopholes for corporations
- Offer a proposal of solutions
- Talk about the specific issues while focusing on what is not working and massage what is working
- Remove our vs their conversations because taxes will affect us all either directly or indirectly when it comes to purchasing power. If people are being taxed too much they will not have the economic capital for purchases. This is what causes a recession/depression to occur.
As a small business owner you must continue to make your voice heard and to stay up to date on small business issues reach out to these organizations and your Senators now:
So is this a tax reform or tax cut? It all depends on who you ask. What are your thoughts?
I thank you and appreciate the opportunity that you have afforded me to represent you once again. I will continue the fight to assure that the voices, needs, and concerns for the small businesses are being heard. If you have a concern or issue that you would like for me to talk about on your behalf within the near future please feel free to contact me.
“Diversity and inclusion are not only for employees, it’s for business owners also. Become a part of the conversation.” Vernita Naylor
Blessings and keep on dreaming…..
Founder/Owner, Jabez Enterprise Group (JEGroup)
Small Business Ambassador Since 2001