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Schock Speaks in Support of Small Business Tax Cut Act

Washington, Apr 19 -

Congressman Aaron Schock (R-IL), a member of the Ways and Means committee, the chief tax writing committee in the House, spoke on the House floor today in support of the Small Business Tax Cut Act, H.R. 9, which will provide needed capital for small businesses to grow and hire new workers. The Small Business Tax Cut Act passed the House on April 19th, 2012.

Aaron speaking on the House floor in favor
of the Small Business Tax Cut Act.
Click here to watch his remarks.

Background on the Small Business Tax Cut Act, H.R.9
H.R. 9, the Small Business Tax Cut, will help small business owners retain more capital, invest in their businesses and create more jobs. Under the proposal, small businesses would be allowed to deduct 20% of their income from taxes irrespective of how they are organized, up to 50% of their W-2 wages (in some cases distributions made to partners may be treated as W-2 wages for these purposes). So, whether you are organized as a corporation or you are one of the 75% of small businesses that operate as a pass-through, you will benefit from this new deduction.

The non-partisan Joint Committee on Taxation has estimated that H.R. 9 will benefit over 22 million small business employers across the United States reducing their taxes by almost $46 billion. H.R. 9 is consistent with the budget plan just adopted by the House and was part of the Pledge to America

The non-partisan Joint Committee on Taxation has estimated that H.R. 9 will benefit over 22 million small business employers across the United States reducing their taxes by almost $46 billion. H.R. 9 is consistent with the budget plan just adopted by the House and was part of the Pledge to America.

What the Small Business Tax Cut Means for Illinois:
As of 2009, in Illinois, there are 249,638 small businesses with between 1 and 500 employees employing 2,454,700 individuals.

How it Works: For simplicity, consider the example of a small business that under current law would pay a 35% federal tax on $100 of income, resulting in a $35 tax bill. Under the House Republican proposal, the small business would be able to deduct 20% of its income from tax (20% of $100 = $20), subject to the 50% W-2 wage limitation. The small business would then pay the same 35% tax on the remaining $80, resulting in a $28 tax bill. Under the House Republican proposal, the small business immediately saves $7 in federal taxes.

Aaron participates in a press conference discussing the importance of the Small Business Tax Cut Act. Click here to watch his remarks.

Note: He was joined at the press conference by his colleagues Reps. Kevin Brady (TX), Marsha Blackburn (TN), Pete Olson (TX), Erik Paulsen (MN), and Bobby Schillling (IL).

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