Paul Ryan Explains How The GOP Tax Plan Will Benefit America’s Small Businesses

By NTK Staff | 11.15.2017 @9:46am

"Your wage and salary income is taxed at the income tax rate. Your business gets taxed at 25 percent," Ryan explained.

Speaker Paul Ryan explained how the GOP tax plan will benefit America’s small businesses, by lowering their tax rate from 40 percent to 25 percent, during a town hall on Tuesday.

An audience member at the town hall asked Ryan about how the current tax system punishes businesses that pay taxes through personal income tax rates.

“The issue we have is, we need that money for capital, for growth, and then at the end of the year, we have to pull money out of the business as a bonus, or into your payroll just to pay the taxes for the company,” the audience member explained. He then asked Ryan how the Republican plan will fix that problem.

Ryan began by explaining how there are two types of businesses in America, corporations and pass-throughs.

Pass-throughs “pay their taxes on the individual side of the tax code. So today that top effective tax rate is their tax rate,” Ryan explained.

“That’s why I say successful small businesses are paying over 40 percent, that’s because the income tax rates go above 40 percent in America,” Ryan continued. “So what we’re trying to do here is say, let’s make sure that the business – that business income gets their tax rate down to 25 percent.”

Ryan then explained how, under the Republican tax plan, business income will be taxed at 25 percent.

“Your wage and salary income is taxed at the income tax rate. Your business gets taxed at 25 percent,” Ryan continued.

Fox News’ Bret Baier followed up by asking Ryan if both the Senate and House tax plans get the small business tax rate down to 25 percent.

“Both plans do that. Both plans do that with different kinds of rules, but they achieved the same objective,” Ryan responded.

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