Small business owners are targeted for a tax increase
Last year, the legislature created a new tax on pass-through entities (LLCs, partnerships, S-corps, etc.) with an offsetting income tax credit intended to alleviate federal caps on state and local tax deductions. Small business owners were supposed to be made “whole” or “held harmless” through this change. Now, in a rush to finish a budget, some lawmakers are looking at increasing the taxes on pass-through entities so they can collect more money from the pockets of small businesses to spend elsewhere.
Claims that a tax hike for pass-throughs will only impact the wealthy are wrong. Most small business owners are middle-income earners, and the vast majority of their businesses happen to be structured as pass-throughs. So any increase in this tax would impact them in a very negative way. Those business owners make plans based on their predicted costs and this will limit their growth.
Small business owners often are the ones who help keep the local economy vibrant. They hire your friends and neighbors and contribute to local charitable causes. Why would the legislature chose to impose these additional costs on them? Often, the small business owner is the last person to receive a paycheck in their business.
If approved, lawmakers will be going back on their word to help small businesses.
