NSBA to Testify on Tax Complexity

April 12, 2011

Today, the House Committee on Small Business will hold a full committee hearing entitled, How Tax Complexity Hinders Small Businesses: The Impact on Job Creation and Economic Growth.

As Congress considers the issues related to fundamental tax reform, the concerns of American’s small businesses about tax reform need to be a part of the debate. The hearing will examine the complexity of the current tax code, the difficulty that entrepreneurs have in complying with the Code and the resulting effect on hiring and economic expansion.

Steven J. Strobel, Executive Vice President & Chief Financial Officer at BlueStar Energy Solutions, located in Chicago, Illinois is testifying on behalf of NSBA. BlueStar is a retail energy supplier providing electricity and energy efficiency solutions to commercial, industrial and residential customers primarily in Illinois, Pennsylvania, Ohio, Maryland and D.C.

This hearing is extremely timely, as NSBA released its 2011 Small Business Taxation Survey this past Monday. Released one week prior to the April 18 tax deadline, this survey provides detailed insight on how America’s small-business community is being impacted by federal taxes. In short: complexity and inconsistency with the tax code are depleting small businesses of their time and money merely so they can handle the administration of federal taxes.

During his statement, Mr. Strobel will explain how the current tax system is so complex and burdensome that small businesses are spending valuable time and financial resources on record-keeping and outside help to ensure compliance instead of using these resources to do what they do best: grow their business, create jobs, and stimulate the economy.

When asked in the NSBA Taxation Survey, how much time and money per year is spent just on the administration of taxes, 50 percent of small businesses said they spend more than $5,000 and more than a third (38 percent) spend more than 80 hours. BlueStar spends over $25,000 annually on tax preparation.

The U.S. economy and job growth are starting to show signs of improvement. However, most small-business owners are not yet in a position to start hiring new employees and they won’t be until they have access to safe, dependable, and sufficient access to capital, and public policies that boost investment and encourage entrepreneurship.

Mr. Strobel’s testimony goes on to say that reducing the U.S. deficit has a real benefit to small-business growth in the U.S. and is something America’s small-business owners feel should be a national priority. The U.S. has always been a leader in entrepreneurship, however if we do not address our record-high deficit, high debt levels, and our byzantine tax code, our global competitiveness will be stymied.

Based on the 2011 NSBA Taxation Survey, when it comes to tax policy, small businesses expressed support for deficit reduction policies that reign-in entitlement spending, and tax reform that reduces both corporate and individual tax rates coupled with a reduction in business and individual deductions.

Joining Mr. Strobel, other witnesses on the panel include: The Honorable Nina E. Olson, National Taxpayer Advocate, Robert Kulp, Founder, Co-Owner and Business Development Director of Kulp’s of Stratford in  Wisconsin, and representing the National Roofing Contractors Association, Monty W. Walker a CPA.

The hearing will take place in Room 2360 of the Rayburn House Office Building at 1:00 p.m.

Please click here to view Mr. Strobel’s full testimony.

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