When it comes to the House tax bill, I couldn’t be more hopeful for the state of small business in Nevada. It’s not perfect, but it’s a good start.
The plan lowers the top marginal small-business tax rate to 25 percent. It allows businesses to apply this rate to roughly a third of their income and taxes the remainder at lower individual rates. The smallest businesses save big with a 9 percent tax rate on income up to $75,000. These new, lower rates also come with anti-abuse rules to ensure the cuts benefit the small businesses they were designed to help.
But the benefits don’t just end with income. The complexity of our current 70,000-page tax code leads many to hire an accountant instead of wading through the labyrinthine rules by themselves. That’s thousands of dollars, and in some cases a full-time salary, devoted to complying with Uncle Sam’s requests instead of engaging with customers or otherwise growing a business.
The House bill allows businesses to immediately write off loan interest and capital investment expenses in full. It’s far more practical than the current system.
As the House and Senate iron out the differences between their bills in the coming weeks, our representatives should keep in mind that the best tax policies for small businesses are those that allow them to retain control of their hard-earned income. It’s Main Street, not Washington, that will truly make America great.