President Obama Pushes Congress to Reform Tax Code
In an effort to reform the current federal tax code and change economic policy, President Barack Obama gave a speech laying out a plan for compromise between Democrats and Republicans at an Amazon.com warehouse in Chattanooga, TN. The plan, which is being promoted as a “grand bargain for the middle class” by the White House, proposes lowering corporate tax rates in exchange for increased spending on creating jobs and improving infrastructure.
Under the new plan, the corporate tax rate would be lowered from 35 percent to 28 percent. Manufacturers would see even more of a change if the initiative was in place, decreasing manufacturing tax rates to 25 percent. This could be the help struggling manufacturers need if the plan came into action.
Impact on small businesses
Obama made a hard push for negotiations to begin in Congress, and has called out Republicans for their refusal to negotiate with the White House or their Democratic peers in Congress. Although their opinions vary greatly, both Democrats and Republicans agree that small businesses need help. However, little legislative progress has been made to reduce the stress small businesses have been under since the beginning of the recession.
“Reversing this trend must be Washington’s highest priority,” Obama said. “It’s certainly mine. But for most of this year, an endless parade of distractions, political posturing, and phony scandals have shifted focus from what we need to do to shore up the middle class.”
Small businesses owners would be affected by the proposed changes to tax laws. As part of the new plan, small business owners would be able to write off up to $1 million in investments come tax season, which could result in huge savings for entrepreneurs. Having access to that extra working capital could make getting a small business loan easier for entrepreneurs, and help small businesses keep their doors open.
Obama also announced a summit that will take place in October. The meeting will focus on ways to increase hiring rates across the country and to boost company revenues.
Overall, though, opinions on the plan’s impact on small business have been separated by party lines.
Republicans almost immediately voiced their disapproval of the speech, disputing claims that the plan would benefit small businesses. Instead, Republican lawmakers said small business owners would be largely ignored by the initiative – many small firms currently pay taxes through individual codes, which the plan would not change.
Senate Minority Leader Mitch McConnell (R-Ky.) said the plan would hurt businesses and slow down growth among small and large firms. McConnell emphasized what he sees as the potential fallout of such a plan.
“The tax hike it includes is going to dampen any boost businesses might otherwise get to help our economy,” McConnell said. “In fact, it could actually hurt small businesses.”
Struggling entrepreneurs rarely have the time to wait for legislators to decide on their fate, and many have been waiting for years for a government program that would help entrepreneurs. These small business owners can come to National Funding for financial assistance. National Funding can provide a merchant cash advance for businesses and help with setting up a business merchant services account.