Small businesses could be negatively impacted by a corporate-only tax reform, if pushed through Congress.
Corporate tax reform would reduce the U.S. corporate tax rate by eliminating business tax credits and deductions for entrepreneurs
and small business owners that pay individual taxes. On average, these individuals would pay 8 percent more in income taxes, according to a report by Ernst and Young, The Hill noted.
"The problem with a corporate-first approach, the Ernst & Young study reports, is that many so-called flow-through entities - businesses that pay taxes through the individual code - use tax expenditures, like one for accelerated depreciation, that could be on the chopping block to pay for a reduction in the corporate tax code," Bernie Becker wrote for The Hill.
Additionally, some smaller firms may see their tax bills increase once the Bush-era tax cuts expire at the end of next year, the source reported.
To remedy the problem, a research institute at American University, the Kogod Tax Center, suggests Congress cut business deductions, credits and preferences and apply the corporate rate to all companies - not just one type of structure.
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