Democrat nominee Joe Biden claims that he will not raise taxes on small businesses if he wins in November.
This is a lie.
Time and time again, Biden has promised to repeal the Republican Tax Cuts and Jobs Act of 2017 (TCJA) “on day one.” If Biden succeeds, millions of American small businesses would see their taxes increase dramatically.
The TCJA implemented a tax cut for pass-through businesses (partnerships, S-Corporations, LLCs) in the form of a 20 percent deduction for qualified business income, also known as the “pass-through deduction.”
There are about 30 million pass-through entities in the United States, and the deduction effectively reduces the top tax rate on pass-through entities from 37 percent to 29.6 percent. According to the National Federation of Independent Businesses (NFIB), 84 percent of small business owners say that the deduction is “very important” or “somewhat important” to their business.
Small business tax cuts and other pro-growth policies help our economy. Small businesses employ 58.9 million people, which makes up 47.5 percent of the country’s total workforce. There are more than 27 million small businesses in the United States, and they generate about 50 percent of our gross domestic product.
Instead of recognizing that the Trump agenda of tax cuts and regulatory relief has benefited small businesses all across the country, Democrats have fought tooth and nail to repeal the TCJA. Democrats including Biden’s Vice-Presidential nominee Kamala Harris also unanimously voted against TCJA.
While Biden claims he would not raise taxes on those making less than $400,000, this is a lie. This statement contradicts his repeated promise to repeal the entire TCJA.
In addition, we have heard this middle class tax pledge before. When he was Vice President, Biden made the same promise not to raise taxes on the middle class. During the October 3, 2008 Vice Presidential debate Biden stated:
“No one making less than $250,000 under Barack Obama’s plan will see one single penny of their tax raised whether it’s their capital gains tax, their income tax, investment tax, any tax.”
However, Biden was instrumental in passing Obamacare, which contained a number of middle class tax hikes, including the individual mandate tax, new taxes on households with health savings accounts, and an income tax hike on those with high medical bills.
In addition, Biden’s vice presidential nominee Kamala Harris has proposed legislation raising taxes on taxpayers earning more than $100,000 per year, a threshold far lower than Biden’s $400,000. She also supports Medicare for All and the Green New Deal which would raise tens of trillions of taxes on the American people.
Based on the Biden/Harris record of proposed and successful tax hikes, it would be no surprise to see their administration move quickly to raise taxes on the middle class and American small businesses.
While Biden claims he will only raise taxes on “the rich,” he has made and broken this promise before. The fact is, if he is elected president, small businesses across the country will see higher taxes that will harm growth and jobs at a time that the economy is recovering.