The White House on Wednesday announced a plan to cut the corporate tax burden from 35 percent to 25 percent over the next four years, as part of President Barack Obama’s plan to create a “full-employed economy.”
The announcement came after President Donald Trump signed legislation earlier this month that eliminates the individual mandate, a key pillar of the Affordable Care Act.
The new tax rate for companies would be 25 percent.
The White’s announcement also calls for a $200 billion increase in investment and tax credits for small businesses, and a plan that would help small businesses invest and hire more workers, as well as lower the corporate income tax rate.
“For too long, business owners have been treated like second-class citizens in America,” Obama said.
“For too many, this has meant paying a tax rate far below the median, or even higher than their peers.
We are creating a more equal economy for all Americans, and I’m asking the American people to help us do it.
The president will sign an executive order tomorrow to provide tax relief for American businesses and workers.
The President’s Tax Plan will create an economy that is more fair, less unequal, and more prosperous, and it will provide millions of Americans with a fair shot at finding and keeping a job, while making the middle class a little bit richer.
I am proud of this administration’s commitment to this economy and its commitment to small business, and will continue to fight for America’s businesses, workers, and our country.”
The White House said in a statement the plan will also help reduce the burden on low- and middle-income families, and give middle-class Americans a tax cut that will boost economic growth and create jobs.
Republicans and Democrats have been struggling to find a compromise to cut taxes for businesses and lower the overall federal deficit, with Trump and Democrats blaming each other for the gridlock.
But Obama’s proposal is likely to be met with skepticism from Republicans and business groups, who have expressed concern that the proposal would leave too much of the burden of paying for the Affordable Act on taxpayers.
It was a relief for many middle- and working-class families, including small businesses that were hit hard by the Affordable Health Care Act and would see their taxes go up under the new tax plan.
House Speaker Paul Ryan said in the statement that the new rate would help middle-and-working-class workers, but would not address the need for tax cuts for corporations.
He also called on the president to “sign an executive action tomorrow to create an economic recovery that is a little more equal for all,” saying that “we can’t afford another decade of stagnation and dysfunction.”
Obama said the plan would create jobs for workers and families, reduce the deficit, and put people back to work.
President Donald Trump signs an executive tax relief bill in the Oval Office of the White House in Washington, D.C., on Jan. 20, 2021.
White House press secretary Josh Earnest said the tax relief would be “a big boost to small businesses.”
“This plan will give Americans who are struggling to make ends meet more certainty that they can invest and grow their businesses, grow their paychecks and help create good-paying jobs,” Earnest told reporters.
“This is a great time to be a small business owner.”
In addition to reducing the corporate rate, the plan includes a tax credit for small employers that could cost as much as $20 billion, according to the White, and $400 billion for businesses that are small and medium-sized.
The credit would not apply to the $250 billion tax cut proposed by the House, but the White said it would apply to companies that are not small or medium-size businesses.