Unsustainable policies, higher taxes and record national debt have had a devastating effect on small businesses. In order to hire new workers, expand operations, and help our economy, entrepreneurs and small business owners need the certainty that comes with lower taxes, fewer unnecessary regulations, and comprehensive tax reform.
Controlling Washington’s Spending Problem:
From World War II through 2009, every dollar of new tax revenue that the government has collected has been associated with $1.17 in new spending. This clearly illustrates that the government is spending beyond its means – an act that every small business owner knows is irresponsible. We must get federal spending levels under control. By reining in unsustainable spending, we can help prevent future tax hikes from being levied on small businesses and families.
Simplifying the U.S. Tax Code:
The U.S. tax code has become an increasingly complex maze of laws and regulations. For newly established businesses, navigating the confusing rules and reporting requirements is extremely tough. Few small companies have the resources to employ tax attorneys and accountants for help with taxes. Studies have found that small firms with fewer than 20 employees pay more than $1200 per employee to comply with tax paperwork and recordkeeping. The 114th Congress should focus on simplifying the tax code to further encourage small business investment, expansion and job creation.
Eliminating the Death Tax:
The Death Tax (also known as the Estate Tax) is a tax applied to the transfer of a person’s assets at death. According to a study by the Joint Economic Committee, the Death Tax is the number one reason family businesses do not survive from one generation to the next. Small businesses are often family-operated and transferred from one generation to the next. In some instances, although the assets transferred after a decedent’s death may be valuable, the heir’s net worth or liquidity may not be high. The heir, facing a large Death Tax bill, may be forced to sell vital equipment or land to pay the tax, rendering the business inoperable.
A small business survey found that more than 80 percent of small employers spend an average of $25,000 annually in attorney/consultant fees and life insurance premiums to avoid the Death Tax. It forces many small companies out of business and keeps others from investing that money in growth opportunities. The 113th Congress should work toward eliminating the Death Tax once and for all.
Small business owners need the certainty of individual tax reform. With over 80 percent of small firms organized as "pass-through" entities -- those that pay businesses taxes on their individual return -- we must make reforms that will keep taxes low.