US Representative Gregory Steube (R-FL) lauded President Donald Trump’s tax policies while in office and argued for their preservation during a small business roundtable.
Representative Steube’s comments follow President Joe Biden signaling he intends to rescind several of President Trump’s tax initiatives, such as a 21% federal small business income tax rate.
President Trump passed the Tax Cuts and Jobs Act (TCJA), a major tax reform law, in 2017.
The TCJA mainly reduced personal income and corporate taxes among other regulatory tax reforms. However, the TCJA is set to expire in 2025 absent an extension.
President Biden’s administration has stated they will permit the TCJA to expire if they retain the presidency.
According to a White House memorandum, Biden seeks to raise the corporate tax, which affects small businesses, from 21% to 28%.
Biden also intends to increase the tax rate for the highest income tax bracket from 37% to nearly 40%.
The TCJA’s expiry would also end the current 20% deduction of qualified income for pass-through businesses.
Pass-through businesses are those who are not legally formed as corporations and report their earnings through the owners’ individual income tax returns.
Thus, the TCJA granted pass-through business owners a 20% reduction in their taxable income.
Many small businesses are designed as pass-through businesses and would thus be taxed at higher rates if Biden’s tax policies are enacted.
Steube argued such measures would hurt his constituents in Sarasota, Florida.
“If Biden is successful, the small business federal income tax will go from 21% to 43%,” said Steube, further alleging the increase “will force small businesses to make tough decisions like laying off workers or increasing prices on consumers.”
