In doing so, the White House
believes it has allies that will serve as an antidote to the large national trade groups – like the US Chamber of Commerce and The Business Roundtable – who have come out in favour of infrastructure
investment but strongly against President Joe Biden’s plan to raise the corporate tax rate from 21 per cent to 28 per cent. Biden is also seeking to limit the ability of American firms to avoid taxes by shifting profits overseas. Biden's plan faces stiff opposition from Republican lawmakers who are more likely to dig in their heels than be swayed by small business sentiment.
Reuters has learned that in recent weeks, White House
officials have held a spate of private briefings with small business leaders to explain Biden's more than $2 trillion-dollar plan, which includes money for traditional infrastructure
projects alongside addressing domestic policy priorities like climate change and racial equity.
On Tuesday, White House
economic advisers and the head of the Small Business Administration, Isabel Guzman, joined thousands of local small business leaders on a call to detail the plan and field questions. The issue of tax fairness was a major theme. "The Made in America tax plan will help level the playing field between small businesses and large multinational corporations, by ensuring that big corporations can't escape or eliminate the taxes they owe by offshoring jobs and profits in the United States, and pay a lower tax rate than small businesses," Isabel Guzman, administrator of the US Small Business Administration, told business leaders on Tuesday.
Most small businesses are pass-through businesses like limited-liability organisations and S-corporations that don't pay a corporate tax. Instead, the owners report business income and pay the tax on their personal tax returns.
Depending on the income, small business owners could pay anywhere from 10 per cent to 37 per cent on their income. Fortune 500 companies, on the other hand, paid an average rate of 11.3 per cent in 2018, due to tax deductions and other measures that lower their tax liability, according to the Institute of Taxation and Economic Policy.
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