NSBA Tax Priorities Sent to SenateJuly 26, 2017
As Congress and the Trump Administration continue to work to overhaul the nation’s broken tax code, Senate Finance Committee Chairman Orrin Hatch (R-Utah) recently called on tax stakeholders to provide ideas, proposals, and feedback on how to improve the American tax system. In response, NSBA submitted a letter of tax reform recommendations on behalf of its 65,000 small-business members.
Our nation’s last major tax overhaul took place more than three decades ago. Since that time, the tax code has grown more complex, has become less fair, and has failed to evolve with the changing needs of the county and the economy. One of the main goals of fundamental tax reform is to make U.S. businesses more competitive and to increase economic growth. For NSBA members, this requires a reduction in taxes on businesses and investment.
In a letter to stakeholders, Chairman Hatch stated that after years of committee hearings, public statements, working groups and conceptual exercises, Congress is poised to make significant steps towards comprehensive tax reform. Members from both parties have acknowledged the shortcomings of the current tax system and the need for meaningful reforms to encourage economic growth and alleviate many of the burdens imposed on taxpayers. Chairman Hatch’s goal is to create a simpler and fairer system that is more conducive to sustained economic growth in the 21st Century global marketplace.
According to Chairman Hatch, in order to achieve those goals, it is essential that Congress has the best possible advice and insight from experts and stakeholders. In order to accomplish this, Hatch called on interested stakeholders to submit comment letters and provide recommendations on a variety of tax-related topics.
Chairman Hatch indicated he was particularly interested in recommendations under one of these four key issue areas:
- Providing much-needed tax relief to middle-class individuals and families through reforms to the individual income tax system.
- Strengthening businesses—both large and small—by lowering tax rates and broadening the relevant tax base in order to put the economy on a better growth path and create jobs.
- Removing impediments and disincentives for savings and investment that exist in the current tax system.
- Updating our international tax system in order to make our nation more competitive in the global economy and preserve or tax base.
In response to the Chairman’s request, NSBA submitted a letter of tax reform recommendations on behalf of its more than 65,000 members in every industry and every state across the country.
NSBA supports a broad bipartisan overhaul of the tax system by dramatically broadening the base—cutting the breaks that litter the tax code—and lowering rates while maintaining revenue neutrality. As Congress debates what tax system should replace the current one, NSBA believes it is imperative that the U.S. moves towards a simpler, fairer tax system that does not attempt to only tweak one piece of the puzzle but instead is a permanent solution. NSBA supports:
- Lower individual tax rates commensurate with corporate rate cuts. Congress should provide the same rate for all businesses whether organized as C corporations or pass-through entities.
- Qualified Personal Service Corporation income should flow out at individual tax rates.
- Allow businesses to immediately deduct the full cost of qualified capital investments, with interest deductibility for those with gross receipts under $10 million.
- Repeal the Alternative Minimum Tax and the Estate Tax to help small business owners pass their companies down to the next generation without the same tax burdens they face today.
- Enact destination-based cash flow tax that provides for “border adjustments” that would eliminate U.S. tax on products, services, and intangibles exported abroad and impose a 20 percent U.S. tax on products, services, and intangibles imported into the U.S.
Click here to read the full NSBA Tax Reform Issue Brief.
Click here to read the NSBA Letter to the Senate Finance Committee.