Ticker

6/recent/ticker-posts

Ad Code

Responsive Advertisement

Small Businesses Support Expansive Tax Reforms Needed to Level the Playing Field and Offset the Costs of ‘Build Back Better’ Plan

Congress has a once-in-a-generation opportunity to fix a disparity between large and small businesses by enacting the tax reforms currently proposed in the Build Back Better plan. Eighty-five percent of small businesses feel the tax code unfairly benefits large corporations over small businesses, while about two-thirds of small businesses support increasing taxes on corporations. But instead of utilizing this moment to enact meaningful changes to our tax system that would help pay for critical benefits in areas such as healthcare, child care, and paid family and medical leave, some U.S. Senate members are preventing progress by whittling down crucial provisions in the plan. Policymakers need to understand that this pushback is not in the best interest of America’s entrepreneurs.

Whenever there are proposed tax reforms, we immediately hear a reflexive cry that they will hurt small businesses. This is usually not the case, and it is certainly not the case in the proposals outlined in the Build Back Better plan. The measures in this bill would in fact level the playing field for small businesses, bolstering their road to recovery and providing a boost to hard-hit entrepreneurs and employees who need more support to participate in the workforce fully (e.g., quality healthcare, childcare, paid leave).

All proposals to raise personal tax rates would affect only a sliver of small business owners whose business income is taxed at those rates. Less than 3% of small business owners earn more than $400,000 in business income, so almost no Main Street small business owners will be impacted by proposals to increase the top individual tax and capital gains rates and revisions to the 199A pass-through income deduction, among other measures.

A proposal to establish a 15% minimum tax on profits would similarly not affect Main Street small business owners. Our research shows that 69% of small businesses support the idea of making the largest corporations pay a 15% minimum tax on profits that the largest corporations report to their investors (“book income”). Establishing a tax on profits from large and highly profitable corporations would stop firms from manipulating taxable income to pay little or nothing in taxes and minimize offshore outsourcing incentives.

Similarly, our research has also shown that 66% of small businesses support setting a minimum tax rate of 21% on corporate offshore profits. Small businesses have minimal amounts of offshore income, so current law unfairly benefits larger corporations over Main Street businesses. Additionally, since only 5% of small businesses are subject to corporate taxes, most small businesses also favor lowering the corporate tax rate above 21%.

The evidence clearly shows that the current tax proposals in the Build Back Better bill would raise significant revenue to fund much-needed programs necessary for small businesses to rebuild better while either benefiting or having no impact on 97% of Main Street business owners. While some of the current tax proposals on the table face an uncertain future, other newly-proposed provisions, such as the Billionaires Income Tax proposal, will also raise necessary revenue without any adverse impact on small businesses.

The pandemic has spotlighted financial disparities that have impacted the smallest businesses, especially businesses in under-resourced communities and communities of color. Now is precisely when we need to be investing in small business owners who are creating jobs and are the bedrock of our communities.

We are at a make-or-break moment to better position our local economies to withstand the next financial crisis. When enacted, the Build Back Better plan will be one of the most consequential bills in our lifetime by providing an essential infrastructure for the success of America’s entrepreneurs while simultaneously leveling the playing field when it comes to taxation. We must act now to advance a thriving and equitable economy.

Enregistrer un commentaire

0 Commentaires