TAMPA — A week ahead of the expected vote on a controversial tax reform bill, U.S. Sens. Bill Nelson and Ron Wyden, D-Ore., visited Tampa to deliver a message to small businesses: This bill will hurt you.
"Small businesses are the economic engine of Florida," said Nelson, a Democrat. With this bill, "they get it in the neck."
The senators discussed the tax reform bill at a meeting with 24 local business leaders, six chamber of commerce representatives and Tampa Mayor Bob Buckhorn.
The broad strokes of the Senate’s 558-page bill include a large reduction in taxes for corporations, a repeal of the requirement for individuals to purchase health care and a larger child tax credit.
It also takes away state and local tax deductions, and the deduction on interest paid on home equity loans.
"This bill would sock an awful lot of people in Oregon and Florida in the wallet right as they’re reaching for the drumsticks and the cranberry sauce this week," Wyden said.
One of the biggest changes in the proposed Senate bill: cutting the top end of the corporate tax rate from 35 percent to 20 percent.
If adopted, Nelson said, small businesses will be taxed at an average of 32 percent. That has some Tampa Bay business owners worried.
"We can’t compete with larger corps if they pay 20 percent taxes and we’re paying 32 or 35 percent," said Brian Butler, CEO of Vistra, a Tampa-based communications firm.
The Joint Committee on Taxation also projected that such a reduction could cost about $1.33 trillion over the next decade.
Republican senators argue that the bill is a way to help put more money back in people’s pockets. Reducing the tax rate, they say, would allow businesses to allocate money to areas like wages, while not being required to have health care would save money for people with few medical issues.
To pay for the corporate tax cut, which would be permanent, individual tax cuts would fade out over a few years. Households with an income under $75,000 will see an increase in taxes by 2027, according to a report published last week by the Joint Committee on Taxation, a nonpartisan congressional committee.
The most controversial aspect of the Senate bill is a provision that does away with the Affordable Care Act’s individual mandate, which requires everyone to purchase health care insurance.
It’s one of the chief concerns for Mickey Jacob, chief marketing officer of Tampa-based BDG Architects. Health care is one of his largest costs.
"It’s hard because in my world I have to compete with the big guys," he said.
Health care coverage is one of the benefits he relies on to attract and retain younger employees. Those costs could go up if premiums overall rise because there are fewer people buying into the health insurance pool.
"Our ability to continue to offer benefits to them that don’t have to come out of their after-tax dollars .?.?. is a huge deal for us," Jacob said.
Last week, the House passed its own version of a tax reform bill by a 227-205 vote.
The Senate bill is expected to be brought to the floor shortly after the Thanksgiving weekend. Ahead of the vote, Nelson and Wyden are calling for greater bipartisanship on the bill to avoid having to change the bill when another political party has power.
"When they take over everything goes out the window and you start all over again," Wyden said.
Contact Malena Carollo at (727) 892-2249 or [email protected] Follow @malenacarollo.