Senate Tax Bill Includes Problematic Provisions for Small BusinessNovember 10, 2017
Washington, D.C. – The National Small Business Association (NSBA) welcomes movement forward on tax reform as the Senate today unveiled their tax package. Similar to the House version, the Senate bill would make sweeping changes to the tax code and reduce corporate and individual tax rates. While the proposal includes some positive changes for small businesses, it falls short of ensuring fairness in taxation for small business and misses the mark on tax simplification.
Below, please find a statement from NSBA President and CEO Todd McCracken.
“While the Senate bill would bring down the top tax rate for small businesses, it maintains a disparity where pass-through entities—which comprise 83 percent of small firms—would be subject to a tax rate significantly higher than the rate for large corporations.
“Perhaps even more concerning is the provision—similar to the House bill—whereby revenues from pass-through entities would be arbitrarily split requiring the majority of revenue, 70 percent, to still be taxed at the higher individual income tax rates.
“We are, however, pleased to see that current expensing provisions for smaller companies—which are permanent—were not phased-out or made temporary, and that smaller businesses will still be able to deduct their interest expenses, a significant and necessary business expense for many.
“Complexity in the tax code is an even bigger problem than the actual taxes levied on most small businesses. Neither the Senate bill nor the House bill would make a significant dent on complexity for smaller companies and could, in fact, increase the administrative burden because of the pass-through income/compensation calculations and differing tax rates.
“Today, we have the first real chance for broad tax reform in a generation. Lawmakers should commit to supporting tax reform that ensures small-business parity, simplifies the system and provides long-term economic stability.”
Celebrating 80 years in operation, NSBA is a staunchly nonpartisan organization advocating on behalf of America’s entrepreneurs. NSBA’s 65,000 members represent every state and every industry in the U.S. Please visit www.nsba.biz or follow us at @NSBAAdvocate.