Quotes by Eric Hylton, Former IRS Commissioner of the Small Business/Self Employed Division; alliantgroup National Director of Compliance
If you have any questions about this article, please send us a message.
- President Joe Biden’s budget includes several tax changes that could have significant consequences for small business owners.
- Among them: a higher capital gains rate that may hurt boomers looking to sell; a change to the ‘step-up’ basis which could hit family-owned firms; and elimination of a real estate provision that has made property owner transactions tax-friendly.
- High-income individuals are most at risk, according to tax experts, and the small business lobby is fighting the tax proposals, which face tough odds in a divided Congress dealing with the debt ceiling.
President Joe Biden’s 2024 budget proposals contain several proposals that could hit small businesses right where it hurts — their wallets.
Proposals in the budget include boosting the top capital gains rate for income over $1 million, eliminating the so-called “step-up in basis” loophole, expanding who has to pay investment income tax and at what rate, and bumping up the corporate tax rate.
“The White House’s 2024 budget proposal contains $2.5 trillion in harmful tax hikes that would crush Main Street’s ability to grow and create jobs,” said Brad Close, NFIB president, in a statement detailing its campaign to prevent the measures from becoming law. “Some of these tax increases are again being wrongly characterized as the closing of a ‘tax loophole’ and would directly hit small businesses and compound with other rate hikes,” Close said.
Although the budget comes at a time when many small businesses are feeling thrown under the bus by the effects of inflation, hiring pressures and other adverse business conditions, the good news is that tax experts are circumspect about the chances of Biden’s wish list passing as proposed.
For one, many of the provisions within the budget have been floated before, and a divided Congress lessens the likelihood they’ll be adopted without revision. Even so, the budget represents efforts to rebalance some of the cuts enacted by The Tax Cuts and Jobs Act of 2017, especially for higher income individuals, said Eric Hylton, national director of compliance at alliantgroup, a Houston-based consultancy.
Eric Hylton held several prominent positions at the IRS, including serving as Deputy of the Criminal Investigation Division and as CI’s head of International Operations. As National Director of Compliance at alliantgroup, Eric employs his years of experience at the IRS to assist alliantgroup’s clients as an ambassador for U.S. small and medium sized businesses (SMBs) and in helping others become tax compliant.