“(Recently) Dunn-Rankin’s lead editorial stated that the government was taking 40% of his profits. I believe he should take a close look at his bookkeeper or accountant. The corporate tax rate is 21% flat, or better yet get Donald Trump's accountant. The Donald didn't pay any taxes 10 of the last 15 years, and only $750 a year on Billions for a couple years.” T.
Thanks T. I think you are partially correct. The legal tax rate for the largest companies in America is 21 percent.
There are over 32.5 million businesses in America, but only 1.5 million – the elite top 5 percent — qualify for the radically-reduced business income tax rate of 21 percent.
America’s smaller businesses –- the other 95 percent of us –- pay a much higher rate of 40.8 percent. And here’s why.
Closely held small businesses are generally organized as sole proprietorships, S Corporations, partnerships, and limited liability corporations. Almost 90 percent of U.S. businesses are truly small businesses, with fewer than 20 employees. They are subject to a tax rate of 40.8 percent on their tax return, compared to Walmart’s 21 percent.
Why should small businesses have twice the tax rate of large businesses like General Electric or Google? Is that in any way fair?
Many of our large companies actually pay far less than 21 percent. According to Fox and CBS, Amazon paid a tax rate of just 1.2 percent on $13 billion in profits for 2019.
How is this possible? How is a local merchant supposed to compete? Why do Republicans and Democrats, who control the tax code, think this is fair to America’s small businesses?
T., I’ve had folks tell me they think Donald Trump is a crook for taking millions, turning it into billions, and never paying taxes. There is a good chance he did it legally. Here’s why — Democrats and Republicans created unique, giant legal tax shelters for real estate.
Most of us buy real estate because it goes up in value. Yet our politicians allow real estate owners to write off the value of their building as if it were going down in value. That “depreciation” shelters the rental income from tax.
It’s a farce — especially when regular small businesses, like your local pizza parlor, pay 40.8 percent on their earnings.
Real estate owners can also sell their appreciated building and buy another, but never pay taxes on the gain. Why is that tax loophole for real estate investors fair if the average person who sells General Motors stock and buys Tesla stock has to pay taxes?
“David, just a note about your silent partner. America may have a few drawbacks, but if you were to write that same opinion in Russia, China, North Korea, Iraq, Iran, etc., etc., I hesitate to think of what could happen to you and your business. We all need to be thankful for where we live.” J.
Thanks, J. I believe most small business owners, like me, are among the most patriotic Americans. We are living symbols of the American dream.
An individual, through grit and perseverance, can live the rags-to-riches American dream. Two-thirds of us dreamers start with less than $10,000.
Small business is the goose that lays America’s golden eggs. Those giants on the stock exchange started out as a small business. America is killing the golden goose.
According to The Brookings Institution, the start-up rate for small businesses has been falling dramatically since 1979 across almost every industry. The entrepreneurship rate has fallen by almost half for workers with a bachelor’s degree.
As a result of declining startups, the U.S. employment with small companies has declined. In 1987, companies less than 10 years old had one-third of all total employment. But, by 2014, young companies only employed 19 percent of all total employment.
Embodied in the American dream is that each individual should have the same opportunity to succeed. The playing field should be level for all participants. Unfortunately, for small business owners in America, there is no longer a level playing field.
J., I’d still rather be in the USA than in Iran, or North Korea — but don’t we want our locally-owned family businesses to have a fighting fair chance? You can do your part by spending your money with our locally-owned Main Street Merchants.
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David Dunn-Rankin is CEO of D-R Media, which owns the Four Corners News-Sun, Winter Haven Sun and Polk News-Sun in Polk County, as well as newspapers in Highlands, Lake and Sumter counties. He can be reached at firstname.lastname@example.org.