The nation remains bad for business, especially small business.
Big corporations have been able to preemptively avoid paying a lot in tax by setting up operations overseas and making use of tax loopholes.
The White House and the U.S. Treasury Department last week decided it was time to fix the nation”™s business tax structure.
How? By cutting taxes for corporations from 35 percent to 28 percent.
With big profits and CEOs earning some 400 times more than a worker in their own company, a tax cut would seem to be wrong at this time.
However, the White House and Treasury Department offered their “framework” to fix loopholes and other tax-evasive measures employed by the big corporations. While details might be lacking, the framework was broken down into five elements:
Ӣ Get rid of tax loopholes and subsidies and cut the corporate tax rate to spur growth in America.
Ӣ Strengthen manufacturing and innovation by cutting the effective tax rate on manufacturing to no more than 25 percent.
Ӣ Establish a new minimum tax on foreign earnings.
”¢ Restore fiscal responsibility and “not add a dime to the deficit.”
Ӣ Simplify and cut taxes for small businesses.
The last item intrigued us: What were the big savings in store for small business? White House and Treasury officials said savings would be realized by making tax filing simpler so that business owners “can focus on growing their businesses rather than filling out tax returns.”
Orrin Hatch, a Republican and a ranking member of the Senate Finance Committee, did not like the plan and its tilt toward helping out the big corporations.
“We should not limit tax reform to the corporate side alone ”“ that wouldn”™t be fair to the millions of hard-working American families and the small businesses which account for roughly half of U.S. private sector jobs,” he said. “Those families and businesses deserve a stronger, more efficient tax code. As I”™ve long said, corporate and individual tax reform must go hand-in-hand.”
While the White House plan may be better suited for the president”™s campaign stumping, there was an interesting item that caught our eye the day before the release of the economic plan. It came out of Albany.
While it doesn”™t have the wow factor as does the White House plan, this one levels the playing field for minority- and women-owned business enterprises by helping them secure credit and in turn obtain state contracts.
Gov. Andrew Cuomo launched the first statewide surety bond assistance program for MWBEs with Travelers and ACE Group both agreeing to participate.
“By breaking down barriers to growth for MWBEs, we are putting that strength to work for all New Yorkers, building a more diverse and competitive business climate,” Cuomo said.
The revolving loan fund will provide irrevocable letters of credit, up to 30 percent of the base contract amount on a specific project, and is expected to facilitate $200 million in new bonding activity over five years, according to the governor”™s office.
Coupled with action to speed up the process of certifying MWBEs and thus increase their participation in obtaining state contracts, the latest action is a win-win for business.
Now if we can only get the White House to do more than pay lip service to small business.
