Small business and the White House’s tax overhaul plan

Jessica SarterSmall Business Lending

This week, the White House unveiled a proposal to lower the U.S. corporate income tax rate from 35 percent to 28 percent while simultaneously eliminating dozens of loopholes and simplifying documentation for small businesses.

While the proposal is sure to vex large corporations such as Boeing and GE who have managed to avoid paying income tax due to various loopholes and deductions, small businesses may actually benefit.

"We want to cut taxes on investment in and by small businesses, and we want to simplify the tax system for small businesses so that they can devote more of their earnings to investment and job creation and less to tax compliance," said Treasury Secretary Timothy Geithner at a congressional hearing.

CNBC reports that the plan will allow small companies to expense up to $1 million in investments, compared to the current maximum of $500,000.

The plan also involves the reformation and expansion of health insurance tax credits for small businesses and a doubling of deductions for startup costs.

Analysts hope the measure will help provide entrepreneurs with more room to finance their hiring and expansion efforts, including the attainment of critical small business loans and credit packages. As small firms have created roughly two-thirds of all new jobs over the past 15 years, according to the Small Business Administration, lawmakers have been particularly wary of taxation and regulation on entrepreneurs and startup companies.

"During a time when job creation is a top priority, it is discouraging that our burgeoning tax code constrains small business growth," Representative Sam Graves, chairman of the House Committee on Small Business, told the source. "Complexity weighs heavily on small employers, because they often lack the resources to hire expensive accountants or legal assistance."