When examining the current U.S. tax code, two things are clear: It is unnecessarily complex, and it is unfair. Lawmakers now see that a high tax rate coupled with a wide disparity in tax bills between industries creates a tilted playing field. That’s why Congress is considering comprehensive tax reform—addressing both corporate and individual rates in an effort to lower your bill and reduce the complexity of your tax return.
We at NFIB have regularly met with the leading drivers of tax reform, Chairmen Baucus and Camp, to brief them on the needs of small-business owners. As a result of NFIB’s efforts, and your calls to Congress, both chairmen support a comprehensive approach to tax reform that would include all rates and serve to directly benefit small-business owners.
Last month, however, President Obama weighed in with a “Grand Bargain” that could derail the entire process. In exchange for lowering corporate tax rates to 28 percent, the president would earmark funds for special spending projects. An even greater concern for small businesses should be that business deductions would be eliminated, thereby effectively raising taxes for most small businesses. Either the president is oblivious to or dismissive of small business, as he totally neglected to address your existence by outlining a corporate-only approach.
How else could you explain the fact that President Obama is dismissing individual tax reform at the outset?
Three-quarters of small-business owners file as individual taxpayers, but the president ignored across-the-board tax reform and instead proposed welfare for corporations that have benefitted from the current unwieldy system. This “solution” will only serve to create an even more untenable situation—because when the tax load is shifted, someone will have to carry the burden.
Bluntly: If enacted, this plan will saddle you and millions of other small businesses with much higher taxes for years while protecting lower rates for many of the largest corporations.
There are already great disparities in the tax code that favor mega-corporations. NFIB has long called for tax reform that levels the playing field for small business. Such unbalanced rules put America’s greatest job-creating sector, small business, at a huge disadvantage.
We continue to insist that any discussion of tax reform must include improvements that will lower the individual rate for small-business owners, as well as simplify the entire tax code. Lowering the corporate tax rate while turning a blind eye to Main Street will result in more unfairness and further drain the lifeblood of our economy.
That’s why the new NFIB-led Coalition for Fair Effective Tax Rates was launched. We will fight for fair and comprehensive reform. We are working hard to ensure that Congress and your corporate counterparts continue to press for tax reform that works for ALL business, not just the mega-corporations the president has deemed worthy.
To this point, Congress understands the importance of including small business in any tax-reform plan, but we need to keep up the drum beat. Make sure your Washington representatives and senators get the message.