Small Business Tax Relief Act

This bill makes several changes to federal taxes. It lowers the income tax rate from 21% to 18% for corporations that make $400,000 or less in taxable income, as long as their total taxable income doesn't go over $5 million. It also lets self-employed people who earn less than $400,000 deduct 75% of their self-employment taxes instead of the current 50%. The bill changes how "carried interest" — the share of profits that managers of private equity firms and hedge funds receive — is taxed, making it subject to regular income tax rates instead of the typically lower capital gains tax rates. It also raises the tax that companies pay when they buy back their own stock from 1% to 1.5% of the stock's value.

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