Business Lobby Cheers Committee's Action on House Tax MeasureBy
NFIB backs bill after changes help more small businesses
Catholic bishops oppose the bill, saying it hurts working poor
Business groups applauded committee passage of the House bill to overhaul the U.S. tax code, including the National Federation of Independent Business, which reversed its initial opposition to the measure.
The NFIB had raised concerns that early provisions in the bill involving limited-liability companies and other “pass-through” entities didn’t help small businesses. But the group backed changes made in an amendment by Ways and Means Chairman Kevin Brady before the committee approved the bill on Thursday.
“We are very grateful to Chairman Brady for listening to our concerns and working with NFIB to ensure that tax reform benefits the greatest possible number of American small business owners,” Juanita Duggan, the group’s president and chief executive, said in a statement. “This amendment would create substantial tax relief for millions of small-business owners who were left out of the original bill.”
The amendment offered several provisions described as making it easier for smaller businesses to succeed and grow. The changes include providing a new tax rate of 9 percent for businesses earning less than $75,000 in income. The benefit would begin phasing out as taxable income exceeds $150,000 and would be fully phased out at $225,000.
While House Republicans gained the support of the small-business lobby, they lost the U.S. Conference of Catholic Bishops, which called the bill “unacceptable.” While the proposed doubling of the standard deduction will help some of those in poverty, it’s not enough, the group said.
“As written, this proposal appears to be the first federal income tax modification in American history that will raise income taxes on the working poor while simultaneously providing a large tax cut to the wealthy,” the conference said in a statement. “This is simply unconscionable.”
The U.S. Chamber of Commerce, the world’s largest business federation, backed the House committee-passed version as a “growth bill” and encouraged members to “examine the overall positive impact” of the measure in their districts.
“We look forward to working with the House and the Senate to continue refining the measure to make it as pro-growth as possible,” Neil Bradley, the chamber’s chief policy officer, said in a statement.
The full House could vote on the bill as soon as next week. Senate Republicans released a summary of their tax-cut plan with many significant differences from the House version, including a one-year delay in cutting the corporate tax rate to 20 percent.
The Senate proposal also preserves the existing mortgage-interest deduction for home purchases with as much as $1 million in debt, while the House version would reduce the deduction to $500,000 in debt for new purchases.
The National Association of Realtors said that while it reviews the outlines of the Senate proposal, it is watching for other changes that could affect middle-class homeowners.
“Simply preserving the mortgage-interest deduction in name only isn’t enough to protect homeownership,” Association President Elizabeth Mendenhall said in a statement.
The Aerospace Industries Association called the Senate bill “a positive step.” The trade group said in a statement it “will continue to enthusiastically advocate that any final tax bill reflects the pro-growth principles,” including a more competitive tax rate.
— With assistance by Anna Edgerton, Laura Davison, Erik Wasson, and Sahil Kapur