Small Business Owners Have Tax Reform Concerns

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The No. 1 concern of small business owners when it comes to tax reform is the possible elimination of deductions, tax credits, exclusions, or other tax benefits without an offsetting reduction in tax rates.

This is one of the main findings from the 2017 Small Business Taxation Survey, which was recently released by the National Small Business Association (NSBA).

The survey of 950 small business owners highlights their views on the tax code, tax policies, and various tax reform proposals.

“Today, we have the first real chance for broad tax reform in a generation,” NSBA President and CEO Todd McCracken said in a written statement. “However, the overwhelming majority of small businesses believe congressional failures – partisanship and a lack of effort – are the biggest challenge facing reform, and one-third don’t believe tax reform will ever be enacted.”

While losing deductions and credits was the top concern of 43 percent of small business owners, other tax reform concerns include a higher top tax rate (21 percent), increased IRS compliance and enforcement measures (15 percent), and new taxation of international operations (5 percent).

According to the survey, the majority of small business owners say administrative burdens (58 percent) are actually a bigger problem than the financial cost of federal taxes (38 percent), and one-in-three small business owners report spending more than 80 hours each year on federal taxes.

The survey also asked small business owners about sales taxes, payroll taxes, and deficit reduction, and asked them to rank the most problematic taxes, as well as the most useful deductions.

Nearly one-in-three (29 percent) small business owners take advantage of the home-office deduction, followed by the home mortgage interest deduction (28 percent) and Section 179 expensing (27 percent).

When asked about tax policy, the most broadly supported tax reform proposal is one that would reduce taxes and deductions for both corporations and individuals – no surprise given the majority of small businesses (83 percent) are pass-through entities and, therefore, file business taxes at the individual tax level.

And because the majority of small businesses don’t export or import, 67 percent said that a border-adjusted tax system, which was proposed by House Republican leaders in their tax reform blueprint, would have no direct impact on their business.

“The need for broad tax reform – and not just a tinkering here and there – is a real need for millions of American small businesses,” said NSBA Chair Pedro Alfonso, who is chairman and CEO of Dynamic Concepts Inc.

Related articles:

House GOP Makes the Case for Border-Adjustment Tax
How Trump’s Tax Proposals Would Affect Businesses

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May 4th 2017 14:24

All I could say this will going to change lots of things in Economy .

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