The U.S. House of Representatives today passed H.R. 9, the Small Business Tax Cut Act of 2012, which allows businesses with fewer than 500 employees to reduce their profit subject to taxation by 20% in the 2012 tax year. Idaho Congressman Mike Simpson supported the measure, which passed with a final vote of 235-173.
Small businesses currently face up to an astounding 35% federal tax. Additionally, the individual tax rates that apply to small pass-through businesses are scheduled to increase significantly in 2013 under President Obama’s budget. This legislation lifts the burdensome federal government thumb off small businesses, which spend three times more per employee on tax compliance than larger businesses.
“I support a permanent overhaul of the tax code to promote economic growth while improving our ability to reduce the deficit,” Simpson said. “This bill immediately addresses the dire situation our nation’s small businesses face and reduces the burden they must overcome in their efforts to invest in our economy and create jobs.”
For over 17 years, small businesses have generated 65% of the new jobs created in our country. The U.S. Small Business Administration Office of Advocacy reports that small businesses represent 99.9% of the 27.5 million businesses in America and employ about half of all private sector employees.
The Small Business Tax Cut Act will provide immediate relief by allowing small business to deduct 20% of their income from taxes irrespective of how they are organized for up to 50% of their W-2 wages.
To learn more about the Small Business Tax Cut and how it can help Idaho, visit http://www.majorityleader.gov/SmallBiz/DOCS/ID.pdf.