During the 2020 Presidential Election, Joe Biden’s Tax Plan was a large part of his campaign promises. In short, Biden wants to tax the wealthy at higher rates while giving reprieve to working-class Americans.
According to Biden’s campaign website, he won’t raise taxes on anyone making less than $400,000. In an article entitled, “A Tale of Two Tax Policies: Trump Rewards Wealth, Biden Rewards Work” it says the following:
“[Joe] Biden will require corporations and the wealthiest Americans to finally pay their fair share. He won’t ask a single person making under $400,000 per year to pay a penny more in taxes, and will in fact enact more than one-dozen middle class tax cuts that will finally give working families the financial support they deserve.”
There has been both praise and criticism of Biden’s approach – particularly as it relates to small businesses. Proponents of the plan said Biden’s plan will ultimately help the middle and working-class Americans, but opponents say it will be devastating in some ways to small businesses, which will have a trickle-down effect to ordinary Americans.
CPA and attorney Mark Kohler made a video explaining how Biden’s plan would impact small businesses, which was published on Entrepreneur.com. Kohler shared what he identified as pros and cons based on his research.
“As a small business owner you’re going to pay more in taxes the more money you make,” Kohler said, noting Biden plans to abolish the $2 trillion tax cut Trump’s plan gave to businesses.
“For small business owners a lot of these write-offs that we’ve been seeing are going to expire and Joe Biden has specifically said hell no, I am not renewing them,” Kohler continued.
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Kohler also said there were things in Biden’s plan that would help small businesses, including a $60 billion dollar small business fund for businesses with 20 or less employees, easing licensing restrictions in certain industries, immigration reform and support for local and regional SBA organizations.
Small business owners in the Black community, specifically have suffered greatly due to the covid-19 pandemic. Nearly half of them have been wiped out, according to Forbes. Many are curious about how Biden’s plan will affect those that are remaining.
Kohler and other critics said while the aforementioned components of Biden’s plan are helpful, in the long run, higher taxes will make it more difficult for small businesses to hire and retain employees.
“Biden’s proposed 12.4 percent payroll tax will hit small business owners with high-performing executives. These firms will have to pay the employer share of this new payroll tax immediately, regardless of how much they earn each year in profits, creating a massive new cost and a disincentive to hiring and wage increases,” Fox Business reported.
Advocates, however, say Biden’s plan will benefit more than it hurts, reiterating that people (and businesses) making $400,000 and more can afford to pay more taxes.
It is not guaranteed Biden will be able to enact his tax plan with Senate control up in the air until Georgia elects its state senators, however there are compelling arguments on both sides.
America will have to wait and see what the ultimate outcome will be.
