As you know, yesterday Congress passed its corporate tax cut bill that reduces the tax rate corporations pay by 40%. The Republicans (yes, this was a strictly partisan bill) who voted for this legislation and President Trump have told all American workers that this will result in higher wages and more jobs.
This morning we heard that some giant corporations (ex. AT&T, Comcast, Wells Fargo and Boeing), that need to curry favor with federal agencies or say thanks to the Trump Administration and GOP, are giving their employees a bonus–possibly $1000.
That’s not the same thing as a permanent raise but it is some minimal effort to give a PR lift to the corporate tax cut advocates.
Unfortunately, if your small business is an LLC, S-corps or a sole-proprietorship, your employees are probably thinking that your business is getting a huge tax cut and will be looking for their increase in wages.
Do not let this misinformation fester with your employees. You should clearly explain to them that you are not a corporation, you aren’t getting your tax rate cut permanently by 40% and while there is a much smaller tax cut for you, it is only temporary (if you get one at all).
Your employees need to understand that whatever small increase in their pay they receive due to individual tax cuts, those will also go away in 2025. At that point they will pay higher taxes than they would have without this tax bill.
This is the message I gave to thousands of small business owners across this nation who joined the Businesses for Responsible Tax Reform on a telephone townhall last night. You can read my entire statement below.
We’ll keep fighting for you to be respected by Congress for your invaluable contribution to our economy. We support a level playing field with big business, simplification of your taxes and growing our local economies from the bottom up.
Statement by Frank Knapp Jr, co-chair of Businesses for Responsible Tax Reform, telephone townhall, December 20, 2017
Thank you for joining us on this very infuriating and sad day. Please stay with us because I have a very important recommendation for every small business owner.
We’re angry today because this Republican Congress has, despite all their talk about wanting to help small businesses, treated us with disrespect…giving some of us a little temporary tax break while permanently cutting the corporate tax rate by 40%.
And instead of simplifying the tax code for small businesses they made it so convoluted that you will spend more money with CPAs than you ever have before to file your taxes.
We’re sad today because this GOP tax bill squandered the chance that only comes around every couple decades to grow our local economies from the bottom up by putting more money with middle and lower income Americans who we know will spend it on Main Street. That won’t happen with this trickle-down tax bill that will only grow Wall Street.
Now for that recommendation I promised.
Tomorrow every small business owner should tell their employees that you did not get a 40% tax cut. You need to do this because workers across this nation will be expecting a pay raise because they have been told that businesses have received a huge tax cut and that tax cut will lead to higher wages. Let them know the truth about how small businesses were treated.