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 Corporate tax reduction will increase profitability to the corporate sector. Increased profitability will trigger the corporate...

 Corporate tax reduction will increase profitability to the corporate sector. Increased profitability will trigger the corporate activities and thus more people will come forward and more business will take shape. This will increase sole proprietorship and partnership

How this would be interesting to hear how other feel about how this new legislation particularly how it affect business owners..
Thank you

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Expert Solution

  • Lower corporation tax will encourage more multinationals to invest in that country
  • Lower tax rates enable firms to invest more – this leads to higher growth and therefore, higher tax revenues.
  • Lower tax rates reduce the incentive for firms to use tax avoidance schemes.

# It depends on the economic climate and also any potential response from other countries

#These companies are operated by a single taxpayer in a wide range of businesses, ranging from babysitters and housekeepers, ride-sharing drivers, construction or handyman services, and even some doctors and lawyers. Because sole proprietorships enjoy fewer legal protections than incorporated businesses and are owned by a single taxpayer, they tend to be relatively small. The net income of sole proprietors is subject both to individual income tax and also to payroll taxes under the Self Employment Contributions Act (SECA).

#The owner of a sole proprietorship is not required to file a separate business tax report. Instead, they will list business information and figures within their individual tax return. This can save additional costs on accounting and tax filing. The business will be taxed at the rates applied to personal income, not corporate tax rates.

# Partnerships are the second most numerous type of pass-through business. Partnerships file an entity-level tax return, but the income of the partnership is distributed to individual partners in proportions specified by their partnership agreement. In addition to being owned by U.S. taxpayers, partnerships may be owned by a wide variety of businesses, individuals, non-profits, or other partnerships. Additionally, limited liability companies (LLCs) can elect to be taxed as partnerships. Because of the tax benefits and legal advantages offered by partnership law, partnerships are now used to organize a substantial share of finance, real estate, and investment management activities.

# So that increasing of sole proprietorships and partnership firms

ekkarill92 answered 2 years ago
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