Support Small Businesses By Reducing Taxes For Businesses That Pay Employees More

 

This bill's purpose is to help small businesses keep up with corporate wages. The bill will offer a tax break, in the

form of a tax credit equal to 3% of their revenue for businesses that spend 40% or more of their income on paying

employees. This bill will add an incentive to either pay their employees more or to hire additional employees, which

cuts down unemployment rates.

 

 

Small businesses are struggling to compete with corporations in sales and in competitive wages, so this bill will help

close the gap between them.

 

 

"Small business" means a business entity organized for profit, including but not limited to any individual, partnership,

corporation, joint venture, association, or cooperative, which entity:

(1) is not an affiliate or subsidiary of a business dominant in its field of operation; and

(2) has 20 or fewer full-time employees; or

(3) in the preceding fiscal year has not had more than the equivalent of $1,000,000 in annual gross revenues; or

(4) if the business is a technical or professional service, shall not have had more than the equivalent of $2,500,000 in

annual gross revenues in the preceding fiscal year.

 

 

The average small business spends about 30% of its revenue on employee compensation, so increasing that to 40% will

generate more revenue than is lost by taxing employees more.

The money lost due to the tax breaks will be recovered through additional income being taxed. If each employee is being

paid 10% more, and they are in the lowest tax bracket of 5.35%, then they will be paying 5% more money than they would

have been before. If they go up a tax bracket, they will pay 2.1% more.

 

 

Standard tax audits by the IRS.

 

 

Thursday, April 16, 2026. This is after taxis are due.