Now that the tax season is over, at least for some of us, the next time we file in 2018, we could be celebrating a new low tax rate, if Mr. Trump has his way.
Small businesses employ about half of non-public sectorAmerican workers, maintaining their health and success is vital to the U.S.economy. Since the last major tax reform in 1986, establishing a business pass-through has become increasingly popular for entrepreneurs since it provides them with lower tax rates than paying the corporate rate. These rates have been higher than most other countries. The New proposed rate should come in at around 15%, which is less than 50% of the now 39% rate.
Individual employees currently pay approximately $600. on every $1600. of gross income, a whopping 37.5%.
These new savings to individual employees and American businesses will be a shot in the arm of much-needed capital which can be utilized in many ways: to lower business debt, (saving companies additional dollars), provide expansion opportunities, advertisement, new hires, new technology, innovation, and spending.
I do believe this new lower rate will improve the economy. American companies, lured by lower tax rates, will be less inclined to flee the country, looking for tax havens in their investments. It will draw economic activity, jobs and new construction to the U.S. and reduce incentives to go abroad.
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