Des Moines, IA – Small business owners in Iowa are gravely concerned by the tax bill introduced today in the U.S. House of Representatives. Though the White House and Congressional leadership have touted their tax plan as being beneficial to small business for months, the bill released today has alarming implications for Main Street small businesses and their customers.
“This tax bill demonstrates that Congress’ priorities are not in line with small business priorities,” said Sue Dinsdale, State Director of Main Street Alliance Iowa. “Small businesses thrive when their communities and customers thrive, but the House is calling for trillions of dollars of cuts to Medicaid, Medicare, and other vital programs in order to give the top 1% of earners in Iowa a tax cut. We’re looking at bleak vision of Iowa, where small businesses and other average taxpayers are funding a huge windfall for the wealthy.”
The House tax bill includes the long-discussed “pass-through” tax cut that reduces the top rate from 36.9 percent to 25 percent. Though President Trump has stumped for this particular cut for months as a way to bolster small business, the truth is that the vast majority of small businesses will see no change in their tax rate from this measure.
“The cut to the top rate on pass-through income is a particularly sly con job,” said Sapna Mehta, Legislative Policy director of Main Street Alliance. “The fact is that 86% of real small businesses already pay a marginal tax rate of 25% or less. The real beneficiaries will be those high-earning individuals who can exploit a new loophole to pay a lot less each year. We’re talking about Wall Street hedge fund managers, not Main Street shopkeepers.”
With this bill, Republicans are also performing a sleight of hand with bedrock middle class tax deductions, such as the state and local income tax deduction, mortgage interest deduction, and medical expense deduction.
“More than anything else, I need more customers,” said ReShonda Young, owner of Popcorn Heaven and a member of Main Street Alliance Iowa. “But the vast majority of my customers are not earning a million dollars a year, so they won’t see any benefit. On the contrary, if this tax bill passes and many of my middle-class customers face paying more tax or more for quality of life services, my business will drop along with my customers’ disposable income. It’s staggering that in this day and age, our politicians are still trying to push the long-debunked myth that trickle-down tax cuts help Main Street America and small business owners like me.”
Organizer, Main Street Alliance – Iowa
Iowa Citizen Action Network