The GOP released its tax reform framework on Thursday, which it is heralding as a blueprint to boost growth for U.S. businesses both large and small, but larger corporations appeared more satisfied with the proposals than their smaller counterparts.
“UPS (NYSE: UPS) … commends Congressional leaders on the release of The Tax Cuts and Jobs Act, the next step in creating a simpler, but comprehensive tax system to stimulate the economy, create jobs and develop a globally competitive tax structure,” the company said in a statement, adding that it hoped to see the reforms enacted before year’s end.
Meanwhile, AT&T (NYSE:T) CEO Randall Stephenson said in a statement late Thursday that he was encouraged by the proposal to slash the business tax rate by 15 percentage points.
“Comprehensive tax reform with competitive business tax rates will ensure lasting economic growth, investment and job creation,” Stephenson said. “We are very encouraged by the legislation introduced today in the U.S. House that proposes a permanent 20% corporate tax rate.”
Manufacturer and aerospace giant Boeing (NYSE:BA) said it was still analyzing the proposal, but was “encouraged by the momentum on tax reform,” and generally supported a simpler, more competitive and efficient system.
On the other hand, small business groups came out full force on Thursday, alleging they would be left behind by the proposed changes to the tax code.
“This bill leaves too many small businesses behind. We are concerned that the pass-through provision does not help most small businesses,” the National Federation of Independent Business (NFIB) said in a statement, adding it is unable to support the House plan in its current form.
Similarly, the founder and CEO of the Small Business Majority John Arensmeyer said the bill would drive up the deficit while doing “virtually nothing” to benefit America’s small businesses.
Treasury Secretary Steven Mnuchin trumpeted the legislation as a means to boost small businesses at the Franchise Expo West in Los Angeles on Thursday. As detailed by the GOP on Thursday, Republicans are sticking with their goal of slashing the corporate tax rate by 15 percentage points to 20%; a change they want to make permanent. Additionally, the plan would cut the pass-through rate to 25%, something Arensmeyer said won’t help small business owners because many small firms are already paying that rate.
The GOP aims to tax repatriated overseas profits at a rate of 5% for illiquid assets and 12% for cash, so long as the company brings back those profits within 8 years.
The bill is set to be taken up in the House of Representatives next week for discussion and amendments. The administration is still aiming to pass tax reform before the end of the year.