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Policy Agenda: Tax Policy

Small Business Majority
Tue, 9 May 2017

For too long, our nation's tax system has benefitted the wealthiest Americans and large multinational corporations—leaving the rest of the country, particularly small business owners, to foot the bill. Small Business Majority's polling has shown that 90% of small business owners believe big corporations use loopholes to avoid taxes that small businesses have to pay, and 92% believe corporations' use of those loohpoles is a problem. 

Our country's largest companies don't need a tax break; rather, we need a tax system that benefits America's entrepreneurs who are focused on growing their enterprises and making payroll at the end of each month. Small businesses can certainly benefit from a reduction in corporate tax rates, but only if accompanied by the elimination of costly loopholes that only benefit large corporations. Moreover, regardless of what type of one-time offshore tax repatriation policy is enacted, we must end the ability of multinational corporations to park profits in other countries simply to avoid paying taxes. 

In sum, any reforms to the nation’s tax code must create opportunities for small businesses and encourage startups and entrepreneurs. To do that, we must take steps to level the playing field, simplify the tax code and ensure fairness. This includes: 

  • Eliminating wasteful corporate loopholes while responsibly lowering corporate tax rates in a manner that ensures a net revenue increase to bring down our deficit and fund key programs.
  • Ensuring any changes to the corporate and personal tax code have a significant, direct benefit to small businesses, as opposed to large businesses and wealthy individuals. 
  • Cracking down on the ability of large corporations to reduce their tax burden simply by moving their headquarters outside the country.
  • Ensuring parity between online and bricks-and-mortar businesses with a reasonable and fair Internet sales tax solution.
  • Simplifying and expanding the small business tax credit created by the Affordable Care Act—helping more small businesses qualify for and utilize it.
  • Passing healthcare tax equity for the self-employed so that freelancers can deduct their healthcare expenses from their FICA tax obligations.
  • Upholding the estate tax in its current form, understanding that it currently protects virtually all small businesses and family farms. 
  • Creating tax incentives for angel investors. More than half of states offer tax incentives for angel investors. Federal support of these efforts would encourage more local and state governments to consider such measures.