Small businesses want more from Obama's tax proposal, groups say
While small business groups support tax reform in general, they aren't happy about President Barack Obama's "better bargain"—at least judging by their responses to president's speech re-introducing the tax reform proposals earlier this week.
First introduced during his 2012 presidential campaign, the proposed reforms would include reducing corporate tax rate and increasing the amount of investments that small business can write off each year. But some groups have reservations. Here are five reasons why.
The president's proposal is too limited.
"On tax reform, we agree with the President on the importance of lowering the U.S. business tax rate, now the highest in the developed world. But corporate tax reform should be part of a comprehensive fix for the individual and business tax codes," said John Engler, president of the Business Roundtable, in a statement.
It offers little to small businesses ...
"It focuses on reducing corporate tax rate, but 75 percent of small business owners pay taxes on the individual side of the code. This doesn't do anything to reduce their taxes," Chris Whitcomb, a tax attorney with the National Federation of Independent Business, told FOX Business.
Martin Regalia, chief economist at the U.S. Chamber of Commerce, agreed with Whitcomb, noting that the President's speech provided nothing of substance and does not address individual income tax codes that cover many small businesses.
According to a recent study, 69 percent of U.S. entrepreneurs start their business at home and 59 percent continue to work from home, even after it's up and running.
... and too much for large corporations.
"Small business owners need corporate tax reform to focus on requiring corporations to pay their fair share for economy-boosting investments that bolster consumer demand on Main Street, not lowering corporate rates," Reshonda Young, operations manager at Alpha Express in Waterloo, Iowa and member of the Main Street Alliance executive committee, told The Washington Post.
According to a recent poll by the alliance, more than three quarters of small business owners support closing offshore tax loopholes that many corporations benefit from.
Engler agreed, noting in his statement that "corporate tax reform must include a competitive, hybrid international tax system, where a company's sales in foreign markets are taxed at the same rate as other companies in that local market--their closest competitors."
There's too much uncertainty on permanence.
Molly Brogan, communications director at National Small Business Association, told FOX Business that while expensing is the way to small business owner's heart, such owners need to have a clearer senses of whether such proposals are permanent or just for a limited time only.
"Permanency is important to us. Taxes are complex for small businesses, so it's absolutely helpful to know if it's ongoing, or if it will only be there for one year and then phased out," she said.