The latest Republican effort to overhaul the US tax code includes provisions to help businesses thrive and create a more favorable environment for creating more American jobs. The Tax Cuts and Jobs Act, announced by House Ways and Means Committee Chairman Kevin Brady (R-TX), would lower the corporate tax rate from 35 percent to 20 percent. And it would reduce the tax rate for small businesses to no more than 25 percent – the lowest tax rate since World War II, Brady said. Also, the legislation would institute safeguards to distinguish between individual wage income and “pass-through” business income.
Under the bill, businesses could immediately write off the full cost of new equipment to improve operations and enhance the skills of their workers. And small businesses could continue to write off the interest paid on loans that help them start or expand a business, hire workers, and increase paychecks.
Additionally, the legislation would keep the low-income housing tax credit that encourages businesses to invest in affordable housing, and preserve the research and development tax credit – to motivate businesses and workers to develop cutting-edge products and services.
Further, the measure would modernize the tax system so some of America’s global businesses will no longer be subjected to double taxation. Brady’s bill aims to make it easier and far less costly for American businesses to bring home foreign earnings to invest in growing jobs and paychecks in local communities.
The bill would also aim to prevent American jobs, headquarters, and research from moving overseas by eliminating incentives that encourage companies to shift jobs, profits, and manufacturing plants abroad. President Donald Trump gave the proposal a thumbs-up, characterizing it as another important step toward providing massive tax relief for the American people.
