Corporate Tax ProposalsBy
Much of the attention on President Obama’s proposed fiscal 2016 budget has been on three big corporate tax proposals that affect mostly multinational corporations. Receiving far less notice are the President’s proposals for small businesses. He would increase the expensing limit from $25,000 (it had been at $500,000 for a couple of years prior to 2015) to $1 million and make it permanent. In addition, businesses with less than $25 million in gross receipts could use cash accounting. Other proposals would increase the deductibility of start-up expenses for new businesses and would eliminate capital gains taxation on investments in small business stock.
If enacted, those prospective changes undoubtedly will affect many more companies than the one-time 14% tax on companies’ accumulated foreign earnings and the 19% minimum tax on overseas earnings do, which are two of the proposals that have been the subject of most comments. The third proposal, which would reduce the top corporate income tax rate from 35% to 28% for most companies and to 25% for manufacturers, would affect companies of all sizes.