How this tax cut protects Latino businesses

It’s late at night, but the lights are still on. Papá is at the kitchen table finishing invoices while the rest of the house sleeps. For a lot of families, this is what running a business really looks like.

Payroll, slow seasons, rising costs, the next hire … and of course, taxes. That’s what keeps small business owners up at night.

This year, taxes were on track to become an even bigger headache for entrepreneurs.

With the 2017 tax cuts set to expire, small businesses were facing across-the-board tax hikes and the loss of a 20% deduction. More than 5 million Latino small businesses were at risk.

And because 70% of Latino entrepreneurs fund their businesses with their savings rather than commercial banks, this tax hike would have been particularly damaging. 

That cash might be the difference between hiring someone new, upgrading equipment, just staying afloat, or having to close shop.

Thankfully, the Working Families Tax Cuts stopped this hike right in its tracks.

Lower taxes for hardworking Latino entrepreneurs

Most small businesses don’t file like big corporations. Their taxes show up on the owner’s personal return, so when taxes go up, it hits hard.

These businesses, called “pass-throughs,” were big winners of the Working Families Tax Cuts. Here’s how:

• Locking the 2017 tax rates protects small businesses from a massive hike that would most likely cost them thousands of dollars.
• Keeping the 20% tax deduction for small businesses protects even more of their hard-earned cash from the government.
• Businesses can now deduct the full cost of their equipment immediately, instead of doing it over many years, making their taxes lower and easier to file.

Here’s how these provisions look in real life.

For business owners like the Escudero family, this bill means that they will not have to pay thousands of dollars more in taxes this year.

So if their jewelry store made $100,000 this year, they will only pay taxes on $80,000 of it.

For entrepreneurs like Angelica Betancourt, it means that if she buys a new food truck, she can immediately write it off on her taxes, instead of having to spread it out over six years of paperwork.

The Working Families Tax Cuts gave Latino small businesses much-needed breathing room, a decision that will show up in the American economy.

Latino entrepreneurs, American economic engine

Latino entrepreneurs are a big driver of American economic growth.

Latino-owned businesses have created nearly a million jobs and generate over $800 billion in revenue each year. And when you zoom out, the U.S. Latino economy clocks in at $4.1 trillion.

If Latinos in America were their own country, it would be the fifth-largest economy in the world.

You can see that hustle across the nation.

You see it on construction sites before sunrise, in retail shops in malls, in restaurants running late into the night, in the real estate business, in health care, and in trucking, landscaping, roofing, and auto companies run by driven and hardworking Latinos.

All of them have done their part to build a $4.1 trillion economy on their own terms. The least Washington can do is give them a fair tax code, one where they get to keep more of their money.

The right way to build Latino prosperity

Don’t get us wrong — Latino entrepreneurs are still facing a lot of challenges across America, but this bill gives them some much-needed relief, and that is some much-needed good news.

But beyond that, this bill is good because it writes into law something all Latinos understand instinctively: It’s the people who create prosperity, not the government.

What the government can do is reward hard work, cut the red tape, and get out of the way.

This bill moves in the right direction.

Latinos are building, creating jobs, and delivering results. Thanks to this bill, Latinos can keep doing their work without having to worry about paying thousands of dollars more to the IRS.

Stand with Latino entrepreneurs

This kind of policy doesn’t happen without a community that shows up. After all, the Working Families Tax Cuts only passed by one vote.

If you believe in small business, economic freedom, and the future Latino entrepreneurs are building — add your name.

Join our grassroots army and help make sure Washington keeps hearing from us.