Trump Calls for Lower and Equal Tax Treatment of U.S. Businesses
Earlier this week, Republican presidential candidate Donald Trump unveiled his revised tax reform proposal in a speech at the Detroit Economic Club. In his speech, Trump called for a reduction and equalization of taxes applied to both large and small American businesses.
Trump’s proposal would lower the federal corporate tax rate to 15% as well as the tax rate for pass-through business income, the vast majority of who file taxes through the individual income tax code. This would allow large and small businesses to compete on a level playing field and empower business owners to invest more money in their company and their employees, rather than Uncle Sam.
While Democrat presidential candidate Hillary Clinton criticized the proposal as a “Trump loophole” for pass-through entities, President of the National Federation of Independent Business (NFIB) Juanita Duggan praised the plan saying, “Mr. Trump’s plan would eliminate the disparity between the way large corporations and small businesses are treated under the code, and all businesses would be taxed at a substantially lower rate. Three-quarters of all small businesses are structured as pass-through entities. Cutting their taxes means letting them reinvest in growth and jobs. That’s precisely what the economy needs.”
In addition to lowering taxes on businesses, Trump also called for the full repeal of the estate tax, applied to many small business owners and farmers who pass their company or land onto their family. More commonly known as the “death tax”, the estate tax is a form of double taxation that should be repealed. Lowering and equalizing tax rates on businesses, as well as the repeal of the death tax should be considered with any future legislation reforming the tax code.