Small Businesses Will Pay The Price Of A Corporate Tax Hike

Proponents of a higher corporate tax rate claim that only America’s largest businesses would pay the higher rate. In reality, more than a million small businesses would see their tax bills increase.

• The president’s tax increase would apply to any entity organized as C-Corporation, yet most C-corps are small businesses: 99.4 percent of C-corps have fewer than 500 employees, and roughly 84 percent have fewer than 20 employees.

• All told, approximately 1.4 million small businesses, employing roughly 13 million Americans, would be forced to pay the higher tax rate.

• A higher corporate tax rate would have a disproportionate effect on small businesses in economically sensitive industries such as retail, wholesale, information, and manufacturing.

• According to the NFIB, nearly 80% of small businesses believe that lower tax rates are crucial to the health of their businesses.

Small businesses are the lifeblood of the U.S. economy, employing nearly half of our workforce and accounting for roughly 50 percent of U.S. GDP. Yet, many currently find themselves struggling to stay afloat amid record inflation, rising interest rates, and lingering effects of the COVID-19 pandemic. Raising the corporate tax rate would add insult to injury, leading to layoffs, decreased investment, and lower economic growth.