The latest version of the Senate Democrats’ settlement bill, dubbed the “Reducing Inflation Act,” will tax thousands of small and medium-sized businesses across the country, according to the American Tax Reform (ATR).
Senate Democrats have changed the wording of their new minimum corporate book tax, which will now hit small and medium-sized businesses well below the $1 billion profit threshold the tax is expected to hit.
The new tax will impose a minimum tax of 15% on the book income of “applicable companies”. However, the latest changes to book taxes will affect any business that has private equity in its capital structure.
As John Kartch, vice president of communications at ATR, said, Say“Any [private equity] In its capital structure, it is now considered a subsidiary of the company and is therefore subject to a 15% book tax. “
BREAKING: The Dem Act raises taxes on SMEs. Any business with private equity in its capital structure is now considered a subsidiary of that company and therefore subject to a 15% book tax.
Sinema needs to remove herself from the bill.
— John Kartch (@johnkartch) August 6, 2022
as ATR explain:
As written, the provision now appears to be restructured to define any company with private equity in its capital structure as a subsidiary of that private equity firm for tax purposes. This means these companies will now be subject to a new 15% tax on book income.
This provision will significantly expand the application of the minimum book tax for small and medium-sized companies that require capital investment to grow their business.
The new tax targets more than 18,000 businesses held by investment funds and partnerships, which employ nearly 11.7 million people, according to ATR’s Kartch.
If enacted, the rule would violate President Joe Biden’s campaign promises to small businesses. Say“No, there will be no increase in taxes on small businesses.”
Kartch called on Arizona Sen. Kyrsten Sinema (D) to “remove herself from the bill” after she announced Thursday that she would vote for the settlement bill.
“In Sinema’s Arizona, the goal of this Democratic tax hike is to [374] A company with 229,000 employees,” Kartch tweet.
In Sinema’s Arizona, the tax increase will target 229 companies employing 229,000 people. pic.twitter.com/C63qIEPgZU
— John Kartch (@johnkartch) August 7, 2022
Arizona Republican Senate candidate Blake Masters, who is running against Sen. Mark Kelly (D), blasted Kelly for supporting the settlement bill after raising small business taxes:
Senator Mark Kelly is about to impose a tax on SMEs – Mark, that’s a bad idea! https://t.co/hMCEREz58i pic.twitter.com/q4RdNqqe1y
— Master Blake (@bgmasters) August 7, 2022
master Say:
So we have this Senator Mark Kelly who said he likes small business. But we have inflation and it’s killing business. We get this inflation because of spending that Mark Kelly voted for. Now he’s voting again for, you guessed it, raising taxes on small businesses. Small businesses will have to pay more, with 18,000 across the country and hundreds in Arizona, soon affecting hundreds of thousands of employees.
“Thanks Mark Kelly. They’ll both have bigger tax bills. Mark Kelly has done more than anyone, literally anyone in Arizona, is dragging this country in the wrong direction. It has to stop,” Master S continued.
