Imagine working your entire life alongside your family building a business, only to have Uncle Sam take almost half of it before you’re able to pass it on to your children and grandchildren. This may be the new reality for many multigenerational small businesses across the country if the tax plan proposed by President Joe Biden becomes law. With Democrats in unified control of the government, albeit by a slim majority in the Senate, the threat of business- and job-stifling taxation has become stronger for not only America’s small businesses but also taxpayers across all income scales.
To start, President Biden proposed reversing many of the Trump tax cuts for small businesses from his signature 2017 Tax Cuts and Jobs Act. President Biden has proposed raising the top individual tax rate (which millions of small businesses pay), eliminating the 20 percent small business deduction, tripling the number of families hit by the death tax, taxing accrued capital gains at death, and raising the corporate tax rate. According to the analysis by five independent think tanks, many left-leaning, the bottom line is that during an already weak economy, Joe Biden’s tax plan would eliminate jobs. Indeed, the Urban-Brookings Tax Policy Center (TPC), the Tax Foundation, the Committee for a Responsible Federal Budget (CRFB), the American Enterprise Institute (AEI), and the Penn Wharton Budget Model all showed that Biden’s tax hikes on small businesses would shrink the economy as a whole and therefore result in job losses across the country. We’ll come back more specifically to President Biden’s plan to increase death taxes.
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