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GOP Chairman: Small Business Needs to Have a Voice in Tax Reform
By: Naomi Jagoda
“I believe that it is imperative for small businesses to have a seat at the table and a voice in the largest tax reform effort in 31 years,” Chabot said in a statement Tuesday.
In a letter dated Monday, Chabot outlined various small business-related issues that should be considered in tax-reform conversations. The letter was addressed to Rep. Peter Roskam (R-Ill.), chairman of the House Ways and Means Committee’s tax-policy committee, and follows a hearing Roskam's panel held earlier this month on tax reform and small businesses.
“As the House Ways and Means Committee continues to discuss tax reform, I know you will keep small businesses at the forefront of the conversation, because when small businesses are growing and expanding, so does the economy,” Chabot wrote.
Chabot said that tax-reform discussions should recognize that small businesses might not break even or turn a profit until they have been operating for a number of years.
“The treatment of net operating losses in the tax code presents problems for young small businesses,” he wrote. “Any tax reform discussion should be mindful of how a small business, that may take years to grow and expand, might be impacted by the treatment of business losses.”
Chabot also said that the current complexity of the tax rules on deducting business investments prevents small businesses from expanding.
In tax-reform discussions, “certainty and clarity should be front and center as talks surrounding depreciation are considered,” Chabot wrote.
The Small Business Committee chairman added that tax-reform discussions need to involve looking at “pass-through” businesses whose income is taxed through the individual code. Chabot said that the “overwhelming majority” of businesses are pass-throughs.
The tax plans from the White House and House Republicans both call for lowering the top tax rate for pass-through businesses. But policymakers also have to figure out how to prevent wealthy individuals from exploiting that lower rate to avoid taxes.White House National Economic Council Director Gary Cohn said last month that the “toughest issues” policymakers are dealing with on tax reform concern pass-throughs.
Read the original article HERE.