Small Business Groups and Entrepreneurs Call on Congress to Prioritize Passage of Permanent, Comprehensive Tax Reform in 2017
Small businesses urge Senate and House leaders to cut rates, enact full, immediate expensing, and move to a territorial system
by TexasGOPVote on July 28, 2017 at 10:25 AM
Washington, D.C., July 17, 2017 – Fixing our broken tax code is critical to helping small businesses and unleashing the entrepreneurial potential of our nation, wrote the Small Business & Entrepreneurship Council (SBE Council) along with allies and small business owners in a letter submitted last week to Senate Finance Committee Chairman Orrin Hatch. Chairman Hatch invited stakeholders and the public to provide feedback and input on tax reform. The letter, signed by leading small business organizations and 50 small businesses throughout the U.S., urges Congress to prioritize the passage of permanent, comprehensive tax reform this year. SBE Council’s letter was also sent to the chairman and ranking member of the House Ways and Means Committee, and the ranking member on the Senate Finance Committee.
“There is a clear need for tax reform that is bold and balanced, resulting in a tax code geared towards growing our economy, not restricting it,” SBE Council President & CEO Karen Kerrigan said. “We believe the best plan on comprehensive tax reform must include a territorial system, with significantly lower rates, full expensing and simplicity as key goals. Comprehensive tax reform must be bold and balanced, and work for all Americans. It would be a tremendous mistake to not capitalize on this historic opportunity to make transformative changes to the nation’s tax code to help grow the American economy and small businesses, which will lead to the creation of high-quality jobs for millions of Americans.”
The letter kicks off SBE Council’s outreach to the nation’s small businesses in an effort to energize the momentum for tax reform and sign on to the principles outlined in the letter. Business owners and entrepreneurs wishing to join the effort can email firstname.lastname@example.org or visit the SBE Council website.
The letter makes three key tax reform recommendations:
First, we must reduce tax rates for all businesses. At 35 percent, the U.S. corporate tax rate is among the highest in the world. The plans offered by both President Donald Trump and by Speaker Paul Ryan and House Ways and Means Chairman Kevin Brady lay a foundation for substantive, productive tax reform, starting with historically deep reductions in the corporate tax rate. Slashing the corporate tax rate will help businesses of all sizes, as more than 86 percent of C corporations today have fewer than 20 employees, and 96.7 percent have less than 100.
Second, it is important to understand that entrepreneurs and businesses are affected heavily by individual income tax rates. Roughly 95 percent of U.S. businesses are non-C corporations that pay the personal, rather than the corporate, income tax. For these business owners, the tax code’s highest personal income tax rate, at 39.6 percent, is a massive drain on wealth and an obstacle to growth.
Third, broader, permanent reform is needed. We are fully supportive of proposals that allow for the full and immediate expensing of capital expenses. By allowing businesses large and small to immediately deduct the full cost of their capital investments, rather than over the course of several years, this fundamental reform would spur business spending and lead to higher levels of investment, quality job creation, and growth across all sectors.