Advocacy groups representing large corporations and small businesses alike cheered the tax reform framework released by the White House and congressional Republicans Wednesday, saying it sets the stage for more job creation and a better economy.
Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce, said the announcement is good news for American families and employers, and that his group is pleased to see consensus among President Trump’s administration and congressional leaders.
“Now, we are entering into a crucial new phase of the effort to overhaul the tax code, and the hardest work is just beginning,” Mr. Donohue said. “The business community will engage throughout the process as lawmakers work through the hard decisions ahead and craft a tax system that improves competitiveness, spurs job creation, and promises higher wages for American workers.”
The framework proposes to reduce the corporate tax rate from 35 percent to 20 percent. It also allows businesses to immediately write off new investment expenses for at least five years — a change from the current system that spreads the process over a number of years.
It also imposes a maximum tax rate of 25 percent on smaller businesses that file their taxes as individuals and can face tax burdens approaching 50 percent — a move that was welcomed by small business groups.
“Make no mistake: the recent progress in the campaign for tax relief should bring optimism to the 29 million small business owners and the roughly 56 million people that depend on them for their livelihoods,” said Alfredo Ortiz, president and CEO of the Job Creators Network, a small business advocacy group.
The plan also moves to incentivize U.S. companies with cash parked overseas for tax purposes to bring the money back and invest it in the country by imposing a one-time repatriation tax.
The framework did say that the deduction larger corporations can now take on net interest will be “partially limited.” House Republicans said in their blueprint released last year that the benefit can incentivize businesses to load up on debt.
The plan also envisions the repeal of certain unspecified business-related tax credits, but said it will preserve current credits for research and development and low-income housing.
• David Sherfinski can be reached at dsherfinski@washingtontimes.com.
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