OSCPA staff report
The Ohio Society of CPAs this week joined 19 other Ohio business groups in opposing a corporate tax increase being considered by Congress.
The organizations made their position known in a Sept. 13 letter to Ohio’s Congressional delegation.
“Our groups oppose President Biden’s proposal to eliminate the tax deduction for owners of pass-through businesses, a crucial deduction that helps small business owners reinvest in their businesses,” the business groups wrote. “In addition, we urge you to support the continued use of stepped-up basis. Proposals to impose additional capital gains at death and to repeal stepped-up basis would be devastating to many family-owned businesses looking to continue those businesses with the next generation.”
A plan proposed Sept. 13 by House Democrats would increase the top corporate tax rate to 26.5% from 21%, impose a 3-percentage-point surtax on people making more than $5 million and raise capital-gains taxes.
The federal Tax Cuts and Jobs Act of 2017 lowering the federal corporate income tax rate from 35% to 21%. Previously, the U.S. corporate tax rate was among the highest in the world.
The legislation on the table now is a step in the wrong direction that would slow innovation and reduce capital for R&D and manufacturing, the groups wrote.
“Many businesses in our state are still trying to recover revenues and jobs lost due to the COVID-19 pandemic. Now is the worst possible time to increase the corporate tax rate and eliminate a key deduction for small business owners… After a year of weathering a once-in-a-lifetime storm, neither individuals nor businesses should have to bear anymore of the burden of this pandemic in the form of tax increases.”