Main Street small business owners say Trump struck out with his new economic plan, citing deficit growth, a disproportionate shift of the shared tax responsibility onto consumers, and loopholes for large corporations as their biggest concerns.
After the campaign's initial tax proposals raised the eyebrows of tax policy experts on both sides of the aisle, Trump revised his plan in a long-awaited economic policy speech. The updated proposal contains major tax breaks for large corporations, and policy that starves communities of resources and leaves small business owners and middle-income earners picking up the tab.
Surprisingly, the National Federation of Independent Businesses (NFIB) called Trump’s plan a “home run,” but for whom? It is not our nation’s small and independent businesses that stand to gain the most from this policy, but rather, the largest and most profitable multinational corporations and their executives.
A cornerstone of the Trump tax plan is a repeal of the estate tax, a platform that was met by cheers from his supporters but stands to benefit only the wealthiest few. The estate tax only kicks in for estates valued at $5.45 million for individuals and $10.9 million for couples, a value realized by just 0.2 %of Americans, or the top 1/5 of the top 1%. The average benefit to these estates, were the tax repealed, is $3 million.
“Trump's tax plan and the support it's received from the NFIB is just one more instance in which the cover of small businesses is being used to rig the system for the wealthy. Nationally, only 20 small businesses and small family farms paid any estate taxes in 2013, a typical year,” says Deborah Field, the owner of Paperjam Press in Portland, Oregon, and former corporate tax accountant. “Don’t be fooled into believing that wealthy people want to repeal the estate tax to help out ordinary folks; they are campaigning to preserve their extreme wealth for their heirs.”
Another contentious element in the Trump tax plan is lowering the tax rate for “pass-through” income (business income claimed on individual tax returns) to just 15%. Despite claims that the reduced pass-through rate would benefit the average small business owners, more than two-thirds of all pass-through business income would flow to the top 1% of tax filers. Wealthy individuals who claim pass-through income would receive tax cuts regardless of their wealth, the size or type of their business, or their role in its operation.
"These tax breaks would deprive the government of badly needed funds for investments in infrastructure, transportation, education, and social services. The types of investments that drive local economies and put small businesses in a better position to succeed,” says Amanda Ballantyne, National Director of the Main Street Alliance. “A tax policy that works for the shops and restaurants on Main Street is one that supports our customer base and our communities. In that regard, Trump's policy fall flat."
“The vast majority of small business owners don’t support tax policy that augments their piece of the pie by cheating their fellow citizens out of theirs. When we contribute our fair share of taxes, those dollars get reinvested in our local communities,” says David Borris, the owner of Hel’s Kitchen Catering in Chicago and Main Street Alliance Executive Committee member. “Local communities that support tens of millions of small businesses from coast to coast.”