Democrats Sneak Through Huge Tax Increases

0
84

According to Americans for Tax Reform, the most recent version of the Senate Democrats’ reconciliation legislation, known as the “Inflation Reduction Act,” would raise taxes on thousands of small and mid-sized companies all over America.

Senate Democrats altered the language of their new minimum corporate book tax, which will now primarily affect small and medium-sized enterprises with profits of less than $1 billion.

The new tax would impose a 15 percent minimum tax on “applicable corporations’ book income.” However, any firm with private equity in its capital structure would be affected by the most recent change to the book tax.

“Any company with private equity in its capital structure is now considered a subsidiary of that firm, and thus subject to 15 percent book tax,” says John Kartch, ATR’s vice president for communications.

As ATR explained:

“As currently written, the provision appears to have been reorganized to define any firm with private equity in its capital structure as a subsidiary of that private equity firm for tax purposes. This implies that these firms would be caught by the new 15 percent book income tax.”

“This provision would greatly expand the book minimum tax’s reach to apply to small and midsize firms that need funds to develop their operations.”

According to ATR’s Kartch, more than 18,000 firms controlled by investment funds and partnerships employing roughly 11.7 million people would be targeted by the new tax increase.

If enacted, this provision would break Joe Biden’s campaign promise to small businesses, when he vowed, “No taxes on small companies will be raised.”

In light of her statement on Thursday that she would support the reconciliation bill, Kartch urged Arizona Sen. Kyrsten Sinema (D) to “step down from the bill.”

“This Dem tax increase would victimize [374] enterprises employing 229,000 people in Sinema’s Arizona,” Kartch stated.

Author: Steven Sinclaire