Saw this, this morning. Then another one.
No, this will not impact me/us right now. And as we are converting the LLC into a C-corp, it should have no real impact until we sell the company.
But it will impact any small business owner with enough revenue to matter. Heck, if you look on tax returns, it appears that lots of small business owners are wealthy. They aren’t but it would appear that way.
They pump every last cent they can into their business. And pull as little out as they can. Just what they need to live.
But this will go very wrong for the nation, in a way I am sure congress has not intended. Let me point out the blindingly obvious.
5.4% of $1M is $54,000. Which is not a terrible salary to make. So as a company grows, and generates more business, it will have to choose between continuing to grow and paying this tax, which means not hiring the additional person it needs to keep growing … or purposefully restraining its growth, so it doesn’t hit this number, and can avoid the tax, and not hire that additional person.
This concept is a very poorly thought out one, with negative ramifications for small business, the engine of our economy.
They don’t want to do what they propose, it really isn’t in anyones interest that they do. The downsides will rapidly swamp the upsides.