(Washington, DC) – Senator Jeanne Shaheen (D-NH), the lead Democrat on the U.S. Senate Committee on Small Business & Entrepreneurship, today released an analysis of the Trump/Republican tax plan.  The report found Republican tax proposals will increase complexity for small businesses and provides a significant tax break for large corporations and high-earning households. 

The Trump/Republican plan to dramatically cut tax rates on pass-through businesses will produce no benefit for the vast majority of small businesses.  In fact, 88 percent of the pass-through rate cut will go to the top one percent of households.

The proposals also add complex new rules for small businesses, including a formula to allocate and classify earnings as either business or wage income.

“Small businesses want tax reform that reduces complexity and levels the playing field with large corporations.  The Trump/GOP tax plan is only going to make matters worse,” said Senator Shaheen.  “The reality is these tax cuts are heavily skewed to the wealthy and big businesses and mean an eventual tax increase for people earning $75,000 or less a year.”

The committee analysis found that rather than helping middle-class small business owners, the vast majority of the benefit of a lower pass-through rate will go to firms that are large and profitable.  Although most small businesses are organized as pass-throughs, a small number of large businesses account for most pass-through profits and economic activity.

Shaheen added: “Some of the country’s most profitable companies and partnerships are organized as pass-throughs, including hedge funds, financial and law firms, and real estate companies like the Trump Organization.  These companies – not Granite State small businesses – account for most pass-through income.  Congress should debate tax changes that benefit small business job creators.  We shouldn’t open a loophole for wealthy business owners to avoid paying their fair share of taxes, while sticking small businesses with the bill.”

According to the report, the pass-through loophole in the GOP/Trump tax plan creates a tax shelter for the wealthy to avoid paying taxes and undermines Social Security and Medicare.  Wealthy earners could dodge approximately $129 billion in taxes, representing nearly 20 percent of the cost of the new pass-through rate, according to the Tax Policy Center.

The committee report: “Small Businesses Lose in Trump Tax Plan” is available HERE.