The American Foundry Society is urging lawmakers to reject a plan from the Biden Administration to fund the Build Back Better initiative by burdening Main Street businesses.
AFS and more than 100 other trade associations delivered a letter to House and Senate leaders on Nov. 3, warning them that the tax hikes under consideration in the BBB framework would target S-Corporations – many of them family-owned operations with modest revenues – through its treatment of taxable trusts.
“The White House … suggests the new surtax would impose a 5 percent tax on a taxpayer’s modified adjusted gross income over $10 million, and 8 percent in excess of $25 million. For pass-through businesses held in trust, however, these thresholds are fifty times lower -- $200,000 and $500,000, respectively. You don’t have to be a very big business to earn $200,000,” the letter reads.
The result would be an unchanged tax rate of 21 percent on large corporations, and a top rate of more than 50 percent on smaller businesses. The coalition called on lawmakers to focus on policies that encourage job growth and investment, rather than further taxing S-Corporations.
“These businesses just survived a global pandemic and for Congress to impose massive tax hikes on them, with rates exceeding 50 percent in some cases, would be incredibly damaging,” the letter reads. “… Individually- and family-owned businesses comprise nearly all businesses in the United States and employ the vast majority of private-sector workers. Yet the framework would significantly increase rates on those businesses at income levels well below the advertised thresholds.”