PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Ways and Means Tax Reform Hearing: An Opportunity to Focus on Small Business Friendly Reform

By at 17 May, 2017, 10:00 am

NEWS

For Immediate Release                                   

Washington, D.C. – The Small Business & Entrepreneurship Council (SBE Council) is pleased that the House Ways and Means Committee is holding an important tax reform hearing this week, on Thursday, May 18. The title of the hearing is “How Tax Reform Will Grow Our Economy and Create Jobs,” and SBE Council president & CEO Karen Kerrigan said that a tax reform plan focusing on supporting small businesses and entrepreneurship will accomplish those goals and much more.

Kerrigan said: “Tax reform is vital to the growth of American small businesses and entrepreneurship. The focus of this effort must be on overhauling a complex and harmful tax system, and advancing reforms that produce a simple and fair tax code for small businesses – one that encourages investment and risk-taking.”

Kerrigan continued, “Based in part on what the GOP House leadership and the Trump administration have put forward, the foundation for substantive, productive tax reform has been established. The key now is to move forward with measures that unify the business community and entrepreneurs, such as greatly reducing tax rates and allowing expensing of capital expenditures for all businesses.”

In a November 2016 report, SBE Council outlined a broad policy agenda that would incentivize risk taking and spur the economy forward, and a key component was tax relief and reform. SBE Council chief economist Raymond J. Keating, author of the study, noted:

“The proposals were based on precedents set by previous and recent presidential administrations, including certain positive tax changes made under Presidents Ronald Reagan, Bill Clinton and George W. Bush. Indeed, the key measures that we highlighted as being vital for reigniting entrepreneurship and our economy stand out as central to the current debate and discussion, such as reducing personal income, corporate income and capital gains tax rates; expensing for all businesses; eliminating the death tax; and tax code simplification.”

Keating added: “Consider that reducing the corporate income tax rate is vital for U.S. business competitiveness. After all, the U.S. imposes one of the highest corporate tax rates on the planet. But reducing and reforming the corporate income tax rate is not just a so-called ‘big business’ issue. It’s very much about small business, as according to the latest Census Bureau data, 86 percent of corporations have less than 20 employees, and 96.7 percent less than 100 workers. At the same time, it must be recognized that 95 percent of businesses as non-C corporations pay the personal rather than the corporate income tax, which speaks to the need to reduce individual income tax rates as well.”

The Trump tax plan would reduce the corporate income tax rate from 35 percent to 15 percent, and extend that lower rate to non-C corporation firms, while dropping the top individual tax rate to 33 percent from 39.6 percent.

Keating also pointed out: “While repealing the ObamaCare tax increases will reduce the capital gains tax rate from 23.8 percent to 20 percent, it is our hope that tax reform will drive that rate even lower, such as back to the 15 percent level it stood at as recent as 2012, or even eliminating this anti-investment tax.”

Kerrigan concluded: “During the 2016 campaign, we heard a great deal about tax reform, and small businesses are counting on a substantive reform effort – featuring relief from high tax rates and burdens on investment, onerous regulations, and ridiculous complexity. The enactment of tax reform will build upon the confidence small business owners are feeling and take our economy to a new level of growth. With higher levels of growth, we will also see enhanced businesses startups which means more dynamism, innovation and quality job creation in our economy.”

Contact: Karen Kerrigan, 703-242-5840 or kkerrigan@sbecouncil.org

Raymond J. Keating, 631-909-1122 or rkeating@sbecouncil.org

SBE Council is a nonpartisan, nonprofit advocacy, research and education organization that works to protect small business and promote entrepreneurship. For nearly 25 years SBE Council has worked to successfully implement a range of policy and private sector initiatives to strengthen the ecosystem for startups and small business growth. To learn more, visit SBE Council’s website: www.sbecouncil.org. Follow on Twitter: @SBECouncil

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