President Joe Biden’s proposal to raise the corporate tax rate is aimed at large corporations, but not all small businesses will escape it.
While the majority of the more than 30 million small businesses in the US are pass-through companies where tax obligations are passed on to owners, 1.4 million of them are organized as C companies and are therefore subject to the corporation tax chamber of commerce, according to the US.
In 2017, there were 80,000 small C-Corps with more than 705,000 employees in the finance and insurance sector, reports the chamber, citing census data.
The Chamber – the largest lobbying group in the US that represents millions of businesses – recently launched an initiative to analyze how Biden’s proposed tax increases will affect small businesses in all sectors of the economy, including agriculture, construction, healthcare, real estate and Finances.
As part of its initiative, the Chamber provides each state delegation with information on how many employers in their state would increase their taxes, including how many small businesses with fewer than 500 employees will be affected.
The proposal to raise the corporate tax rate from 21% to 28% was originally intended to fund Biden’s plan to modernize the country’s infrastructure, but was thrown overboard under a bipartisan agreement. Washington insiders, however, said the tax hike plan could be revived later.
In the gallery above are the states with the most small businesses organized as C-Corps, according to the chamber that collected data from the IRS and the Census Bureau.