Republicans on the House Ways & Means Committee, the House’s chief tax writing committee, pointed out during a Tuesday hearing that if Congress lets President-elect Trump’s tax cuts from his first term expire, millions of small businesses in the United States will see a top tax rate that is higher than what small businesses in communist China pay.
Tuesday’s hearing launched debate in the new Congress over how to handle Trump’s expiring tax credits, key provisions of which are slated to expire later this year. Among those key provisions is a new 20% tax deduction ushered in by Trump in 2017, known as Section 199-A, which provides tax relief for qualified trade or business expenses incurred by taxpayers that are not corporations.
But, if Trump’s Section 199-A deduction expires later this year, small business owners could see their top tax rate more than double to 43.4%, which is roughly 20 points higher than what businesses in communist China …