President Trump's tax-reform proposal calls for cutting the top corporate tax rate from 35 percent to 15 percent, emphasizing the need "to help the small businesses that are the true engine of our economy." The plan the GOP leadership is expected to reveal on Wednesday is still unknown, though there has been talk of a reduction to 20 percent in the corporate rate, not the 15 percent Trump wanted.
Either way, small-business owners in the latest CNBC/SurveyMonkey Small Business Survey have only tepid expectations about tax reform ahead. Not even a third of them expect changes in tax policy to give their businesses a boost, and just about as many anticipate tax policy changes being a drag on their operations (31 percent expect positive changes; 27 percent negative ones). A narrow, 40 percent plurality don't expect such reform to have much of an impact at all.
The lukewarm outlook runs counter to the broader support Trump gets among small-business owners, nearly half of whom (47 percent) report paying effective tax rates in excess of 15 percent last year. Another complicating factor: Nearly a quarter of all small-business owners indicated they didn't even know how to bucket their effective tax rate. After all, it's complicated, which is part of the point of reform.