Business owners unsure about the future will also have to contend with a series of tax changes in the years to come,One big factor is the 2017 Tax Cuts and Jobs Act, which permanently lowered the corporate income tax rate from 35% to 21% — but it also saved money by making smaller tax cuts temporary or phasing out other tax benefits
At the end of 2022, so-called “bonus depreciation” in which businesses could immediately deduct short-term investments in things like equipment and vehicles, will start to phase out. Instead of deducting those expenses all at once, businesses will only be able to deduct 80% all at once, with the remaining 20% over the course of several years, depending on the item. Every year, the amount businesses can deduct will reduce by 20%.
“When you are talking about the 2025 discussion, there will be big incentives to come to a deal,” Watson said, adding the combined provisions come out to about $2 trillion over 10 years. “It would be a really significant tax hike to let everything expire and not just on higher income earners. It will require some action.”Canceling the business tax hikes and making them permanent could add about 105,000 jobs and increase gross domestic product by about 0.6%, according to the Tax Foundation.