Graves: Tax Reform for Everyone
Not too many small business owners we know have time to read the front page of the newspaper, let alone take the time to comprehend the 70,000 pages on the IRS tax code.
Yet, that is exactly what is expected of business owners, who in addition to making sure their companies stay competitive must also make sure they are in compliance on tax issues.
In today's Roll Call, the chair of the House Small Business Committe, Representative Sam Graves (R-Mo.), pointed out the burden on small businesses due to the complexity of the tax code.
"[U]nlike larger corporations, small firms often lack the resources to hire expensive accountants or legal assistance," he writes in an op-ed piece for the . "In fact, studies have shown that the average compliance cost per employee for small businesses is almost twice the per-employee cost for the average large firm."
At the same time, 95 percent of businesses pay their taxes on individual returns rather than corporate returns. These companies are being taxed on income they leave in the company to reinvest, meaning they pay higher taxes, leaving less money for hiring and upgrading plants and systems.
Because of this, Graves calls for Congress to consider individual reform along with corporate reform when evaluating tax reform proposals.
"Take note of a report by the Joint Committee on Taxation, which estimates that raising the marginal tax rates for individuals making $200,000 and families making $250,000 would affect about 750,000 taxpayers and account for a whopping 50 percent of the estimated $1 trillion in business income reported in 2011."