Small businesses are the engines of American job growth and wealth creation. They’re the centers of Main Street communities in towns across the nation.
Now, Democrats are aiming to take a bigger slice of their profits to spend on the politicians’ own priorities in Washington, D.C.
Senator Rand Paul has used a new report to alert Americans to Democrats’ plans. Fox Business’s Haris Alic and Kelly Laco report:
Sen. Rand Paul, R-Ky., is out with a new report showing the Democrats’ proposed tax hike on pass-through entities would fall disproportionately on small businesses.
Paul, the top Republican on the Senate Small Business Committee, said that if Democrats succeeded in raising the tax, more than 8.3 million businesses would be impacted.
“Small businesses everywhere are already struggling with record high prices on everything from gas and rent to labor and supplies needed to run their businesses,” said the senator. “And now, as the U.S. faces historically high inflation, Senate Democrats seem completely content with adding to their struggles by passing yet another tax and spending spree.”
Congressional Democrats have long been eager to raise taxes on pass-through businesses, which are not subject to the corporate tax rate. Instead, owners of such businesses claim any profits as income on their individual tax returns.
Currently, Democrats are eying a 3.8% tax on pass-through businesses to bolster federal funding for Medicare. Lawmakers also say the tax hike would kick in after a certain threshold in order to ensure the wealthy pay their fair share.
However, Republicans say that framing is deceptive. They point to Census Bureau data that shows 64% of all small businesses in America are incorporated as pass-through entities.
Paul said the tax hike was inappropriate given that small businesses were already being squeezed by 40-year high inflation.
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