First Rev of Proposed Tax Plan Has Relief for Small Business [video]

Secretary of the Treasury Steven Mnuchin and National Economic Director Gary Cohn

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Tom Perez weighs in

 “Trump’s latest proposal is another gift to corporations and billionaires like himself,” said Tom Perez, the Democratic Party chairman. “Trump must release his tax returns, as millions of Americans are demanding, before Congress can consider any Trump tax plan. We must know how much Trump would personally financially benefit from his own proposal.”

Chuck Schumer weighs in

 “The very wealthy are doing pretty well in America," said Sen. Chuck Schumer (D-NY). "They don’t need another huge tax break.”

“We don’t need a tax plan that allows the very rich to use pass-throughs to reduce their rates to 15 percent while average Americans are paying much more,” Senator Chuck Schumer of New York, the Democratic leader, said Wednesday. “That’s not tax reform. That’s just a tax giveaway to the very, very wealthy that will explode the deficit.”

The issue or challenge to be negotiated is how to prevent business owners from gaming the tax system under the new rate. If the 15% pass-through rate holds, many business owners would want more of their bottom line classified as business income that is taxed at the new low rate. They will want to classify less of their income as personal income – say, their salary -- which would likely be taxed at higher rates.

While small business tax relief had been teed up there are many challenges and much debate ahead. 

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