Considering the new tax law cuts individual income taxes, which lowered rates and raised thresholds for nearly every tax bracket. This helps the roughly 75 percent of small businesses that pay taxes as individuals. These companies also benefit from the higher threshold for the Alternative Minimum Tax, which now kicks in at a million dollars instead of $160,900. Finally, tens of thousands of small businesses benefit from the doubling of the estate tax exemption. Many family-owned firms can finally keep the business in the family.
Most importantly, more than 90 percent of small businesses organized as pass-throughs can now claim a 20 percent deduction on business income, a concept we originated and helped secure. Congress’s Joint Committee on Taxation estimates this deduction saved small businesses some $27 billion in 2018. Over 10 years, it will enable small businesses to put an estimated $414 billion back into their employees, their communities, and their futures. This is the largest tax cut for small businesses in history
The law’s tax cuts for corporations are permanent. Its individual tax cuts and the small business deduction are not.
A bipartisan group of Representatives has already introduced a bill – the Main Street Tax Certainty Act – to make the tax cuts permanent.