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President Donald J. Trump is Giving Small Businesses a Boost

President Donald J. Trump is Giving Small Businesses a Boost | whitehouse.gov

the WHITE HOUSEPresident Donald J. Trump

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The White House
Office of the Press Secretary
For Immediate Release

President Donald J. Trump is Giving Small Businesses a Boost

“Together we are unleashing a new era of American prosperity, perhaps likes we have never seen before.” – President Donald J. Trump

SMALL BUSINESSES ARE CRITICAL TO THE ECONOMY: Small businesses are a primary driver of the American economy and when they succeed so does the country.

• There are nearly 30 million small businesses in the United States, employing 57.9 million American workers, according to the U.S. Small Businesses Administration.

o 48 percent of all American workers are employed by small businesses, defined as firms employing fewer than 500 employees.

o Historically small businesses are responsible for two out of every three net new jobs created in America.

• Over half a million new small businesses are launched each year in the United States, creating more than 2.5 million new jobs per year, according to the Bureau of Labor Statistics.

• Nearly half of the United States gross domestic product (GDP) is driven by small businesses, according to the U.S. Chamber of Commerce.

o Over 97 percent of United States exporters are small businesses, according to the U.S. Small Business Administration.

TAX REFORM FOR SMALL BUSINESSES: The tax reform plans in the House and Senate would cuts taxes for small businesses.

• Under the House tax reform bill, businesses organized as sole proprietors, S corporations, or partnerships would have their top marginal tax rate capped at 25 percent for qualified business income.

o This would be the lowest top marginal tax rate in more than 80 years.

o Over 99 percent of American businesses are incorporated as one of these “pass-through” firms and currently face a top Federal marginal tax rate of 39.6 percent.

• Under the House bill, small businesses that file a joint return would have their first $75,000 of income taxed at a low rate of 9 percent.

• Under the Senate bill, businesses organized as sole proprietors, S corporations, and partnerships would be able to deduct 17.4 percent of their qualified business income with some restrictions on high-income households.

• For the next five years, American businesses will be able to immediately write off the full cost of their heavy equipment and other capital investments.

o This will help American businesses afford the heavy industrial machinery and other capital investments they need to grow.

HIGHER GROWTH, HIGHER WAGES, AND MORE JOBS: The tax reform bills in the House and Senate will increase investment in the American economy, leading to higher growth, increased wages, and more jobs for hardworking Americans.

• Cutting the top Federal corporate tax rate from 35 percent to 20 percent and allowing businesses to write off the full cost of non-structure capital investments immediately would mean faster economic growth and higher wages, according to President Trump’s Council of Economic Advisers (CEA).

o GDP could increase by between 3 and 5 percent in the long term.

o American annual household income could increase by an average of $4,000.

• A 3 to 5 percent increase in GDP over ten years could represent an additional $700 billion to $1.2 trillion in economic output, based on CEA’s calculations and the Congressional Budget Office’s baseline.

o Just cutting the corporate tax rate to 20 percent is estimated to increase long-run GDP by 3.1 percent, according to the Tax Foundation.

• Developed countries that have lowered their effective corporate tax rates have experienced wage growth across skill levels.

o Wages for American workers of all skill levels would increase after corporate taxes are cut.

o Developed countries with the low corporate tax rates have seen significantly higher wage growth compared with developed countries with higher rates.

• Cutting corporate tax rates will encourage firms to invest back in the United States, creating well-paying jobs for hardworking Americans.

o After President Bush’s 2003 tax cuts, the economy created 7.8 million jobs over five years, based on data from the Bureau of Labor Statistics.

o After President Reagan’s 1981 tax cuts, the economy created 14.8 million jobs over five years based on data from the Bureau of Labor Statistics.

o After President Kennedy’s tax cuts, the economy created 12.0 million new jobs over five years based on data from the Bureau of Labor Statistics.

REMOVING THE BURDEN ON SMALL BUSINESSES: President Trump has already taken action to remove the regulatory burdens all businesses face, particularly small businesses.

• Small business owners have the highest levels of optimism in over a decade according to Wells Fargo.

• Federal regulations cost the American economy $1.9 trillion and small businesses with 50 or fewer employees face regulatory costs nearly 20 percent higher than the average for all firms, according to the U.S. Chamber of Commerce and the National Association of Manufacturers.

o Small businesses are punished disproportionately by excessive government regulation and face $11,724 in regulatory burdens per employee versus $9,083 for firms with more than 100 employees, according to a study by the National Association of Manufacturers.

• President Trump signed an Executive Order, which mandates that for every one new regulation, two old regulations must be eliminated in order to control regulatory costs.

• President Trump signed into law 15 Congressional Review Act resolutions – blocking harmful Obama-era regulations from being implemented.

• In President Trump’s first six months, the Administration has approved the fewest regulations with an economic impact of more than $100 million in more than twenty years, according to the American Action Forum.

seen at 22:04, 29 November in Whitehouse Press Briefings. Email this to a friend.
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