Hultgren Reintroduces Bring Small Businesses Back Tax Reform Act
Washington, D.C. — U.S. Representative Randy Hultgren (IL-14), along with Rep. Jason Smith (MO-08), has reintroduced H.R. 1425, the Bring Small Businesses Back Tax Reform Act. The bill provides immediate tax relief and reduces administrative burdens on a class of U.S. businesses that has proven itself vitally important to American workers and the economy at large. Among other events, last summer Rep. Hultgren hosted a forum at the McHenry County College Shah Center with small business owners to discuss the challenges they face—over-taxation, over-regulation and a lack of access to capital—and policies and solutions to help them grow.
“Growing up in a small business made me familiar with the struggles they face every day. When I travel throughout my district, small and mid-market business owners tell me that among many obstacles they face to expanding their operations and hiring more workers, high taxes remain central,” said Rep. Hultgren. “Small businesses are the engine of America and employ more than 2.4 million workers in Illinois alone. Yet governments tax their capital like it is personal income, and it isn’t working. As small businesses goes, so goes the American economy. As Congress considers comprehensive tax reform, it is time we give our small businesses the freedom, means and flexibility to expand and create jobs. My bill will give these employers room to grow by giving them back time and resources.”
A national poll conducted by Job Creators Network shows that only one-in-five of small business owners plan to hire more employees over the next year. Among other challenges, small business owners cite their tax burden as a main obstacle to growing their business. Pass-through businesses, organized as S Corporations, sole proprietorships, partnerships, and LLCs, comprise more than 60 percent of American companies and more than 50 percent of private sector jobs. Because these businesses “pass through” income and losses to the owner(s), many are subject to combined state and federal income tax rates over 50 percent.
Key provisions of the Bring Small Businesses Back Tax Reform Act include:
- A new 12 percent tax rate on a pass-through business’s first $150,000 in income and a 25 percent tax rate on income above $150,000.
- Immediate expensing of all investment in equipment by pass-through businesses.
- Simplified cash accounting for tax purposes for all businesses with gross receipts under $25 million.