What the GOP tax bill means for businesses
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I'm David Brancaccio in Los Angeles. After Israel launched attacks on Iran's nuclear capabilities, open warfare in the region is forcing money to shift on financial markets right now. Germany's DAX stock index is down 1.5%. Here, Dow and S&P futures are both down 1.1%. NASDAQ futures are down 1.4%. The VIX index of stock market volatility for the U.S. is up 16% overnight.

Iran is the seventh largest producer of crude oil in the world, equivalent to Iraq and just ahead of the UAE and Brazil. Here's Stuart Clarkson with our partners at the BBC. Global oil prices surged by more than 10% shortly after news broke of the attacks, reaching levels not seen since January.

A barrel of West Texas Intermediate, the key benchmark for US oil, is now trading at $75, 9% higher. The European benchmark Brent Crude is also at $75, around 9% up. Traders are concerned that a conflict between Iran and Israel could disrupt supplies coming from the energy-rich region. The Middle East accounts for about 30% of the world's oil supply, and a fifth of it travels through the Strait of Hormuz, which borders Iran.

The cost of crude oil affects everything from how much it costs to fill up your car to the price of food at the supermarket. In the UK, I'm the BBC's Stuart Clarkson for Marketplace. Right now, oil traded in New York is just above $74 a barrel, again the highest since late January.

President Trump is acknowledging that the toll immigration rates are having on some industries that rely on immigrant workers, specifically food supply and hotels. Yet it's not clear if he will alter the workplace sweeps and deportations. Marketplace's Nancy Marshall Genzer reports.

Farmers and business owners are complaining about ICE raids targeting their workers. Trump acknowledged that yesterday in a social media post. He singled out the hotel and leisure business, which of course would include his hotels and golf courses. In the post, Trump said farmers and hotel and leisure businesses have stated that, quote, our very aggressive policy on immigration is taking very good long-time workers away from them, with those jobs being almost impossible to replace.

The American Farm Bureau Federation issued a statement yesterday saying it appreciated Trump's comments, adding that without those workers, there is a risk of supply chain disruptions similar to those experienced during the pandemic. Trump said changes are coming but wasn't specific. And later yesterday, Trump resumed more aggressive posts about immigration, saying people here illegally should either self-deport or, quote, ICE will find you and remove you.

I'm Nancy Marshall-Genzer for Marketplace. Hi, everyone. It's Neil Scarborough, Marketplace's general manager with an important message. The recent rescission package being weighed by Congress threatens to cut a billion dollars in federal funding for public media.

If you want to voice your opposition to these efforts and keep programming like Marketplace on the air, please consider contacting your congressional representatives to tell them that public media matters to you. You can learn more at marketplace.org slash action.

We continue to comb through the evolving big package of tax cuts and spending being worked out by Republicans in the Senate to try to align with what came out of the House of Representatives. We've been exploring effects on households, but today, businesses. Let's bring on Marketplace's senior Washington correspondent, Kimberly Adams. Morning, Kimberly. Morning, David. Now, remember...

But Congress made the tax cuts for corporations, as opposed to individuals, for corporations permanent in that 2017 law. So what's in this reconciliation package for businesses?

Quite a bit, especially for small and medium-sized businesses. I spoke with Jeff Brabant, who's vice president for federal government relations at the National Federation of Independent Business, and he told me he really feels like businesses came out on top in this bill. For example. Right now, the cap on full and immediate expensing for equipment for small businesses is

is one and a quarter million dollars. Congress wants to double that to two and a half million dollars, which we think is a really good thing to encourage small business owners to invest in new equipment, buy a new tractor if you're a farmer. But the big win, says Brabant, is making what's called the pass-through deduction permanent and expanding it. You're the best, Kimberly, because you're going to try to explain the pass-through deduction. How does it work and what does the GOP want to change?

So if you're a business that's a sole proprietorship and LLCs or some partnerships and S-Corps, you pay your businesses taxes at personal income tax rates, which are much higher than what corporations pay. So the 2017 law gave an extra deduction for those businesses. But a lot of people have complained that it doesn't really help small businesses that much. Richard Trent is executive director of the small business advocacy group Main Street Alliance. Richard Trent

So the initial numbers on this are that the top 1% of small businesses are reaping 50% of the benefit coming from that deduction. So this is a small business deduction that costs about $800 billion, the vast majority of that benefit going to the largest small businesses in the country. Right now, that deduction is 20%, but this bill would make it permanent and boost it to 23%. All right.

Now, Republicans want to make major spending cuts to help partially pay for the tax cuts. But how might some of those cuts affect businesses? Well,

Lots of different ways. So, for example, this bill threatens many of the Inflation Reduction Act or green energy tax credits. And Michael Negron with this group, Small Business Majority, and a senior fellow at the Center for American Progress, gives this example of possible impact of that. There were credits for solar to support solar installation. There were small businesses that made a living out of essentially marketing those tax credits and going to homeowners or going to businesses and

Same goes for energy efficient home improvements. And this bill would just about immediately terminate them. Of course, this is just the House version of the bill we're talking about. The Senate is working through it and hearing from lobbyists and constituents so things could change. All right. Marketplace's senior Washington correspondent, Kimberly Adams, never afraid of getting into the nitty gritty. Kimberly, thanks. You're welcome, David.

A fresh analysis by the Congressional Budget Office finds the mega bill would take $1,600 a year away from the poorest households while increasing the income of the wealthiest households by an average $12,000 a year. Middle-income households would see between $500 and $1,000 extra. While the lowest-income households make too little to pay income tax, cuts to SNAP food stamps and new tougher rules for Medicaid would be drivers of the decrease.

Treasury Secretary Scott Vasant and other Republicans downplay the nonpartisan CBO's work, suggesting not passing the bill would be catastrophic. In Los Angeles, I'm David Brancaccio. This is the Marketplace Morning Report from APM American Public Media. Hey, David Brancaccio here. Over the last few months, you may have heard me talk about the home that my family lost in the California wildfires this year.

Well, I recently chatted about rebuilding our Altadena, California cottage with the team over at This Old House Radio Hour, a radio program and a podcast from American Public Media. So for a tale of new beginnings or if you need any tips for your own home improvement projects, this episode has you covered. You can find episodes of This Old House Radio Hour wherever you get your podcasts.