The uncertainty hanging over tax reform has been a sticking point for small business owners for years as Congress continues to approve temporary cuts, the latest of which was negotiated by Congress in mid-February.
Business owners continue to struggle with the implications of the tax code, reports Newtek, the largest non-bank lender to small businesses, which surveyed more than 1,300 small businesses about their thoughts on paying taxes.
Perhaps the most surprising revelation to come from the Small Business Authority Market Sentiment Survey, was that “55 percent of respondents said they do not understand their tax returns and sign off on them anyway,” said Barry Sloane, CEO and president of Newtek.
That could be one reason why the majority of respondents are against paying a flat tax. The changes that could result prompted 57 percent of respondents to say the would prefer to pay the same tax amount and receive either the same or fewer government services rather than pay a flat tax. "Small business owners did not specify which services they would want to forgo," said Sloane. "But they did say they associate more government services with a larger government, which they are against."
Sloane said those surveyed would rather have Congress pay down the national debt than offer more services.
Response to the flat tax question was a surprise, said Sloane. "You think they would be in favor of a simple tax structure. But when politicians say they want to get rid of certain deductions to create a flat tax, small business owners want specifics,” he said. “Which deductions would they get rid of?"
Those omissions could impact a small business substantially. "In the priority pecking order," said Sloane, "Small business owners are more worried about paying their bills versus tax simplification."
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