During a hearing before the House Committee on Small Business, small business owners had clear advice for the Joint Select Committee on Deficit Reduction — the so-called Super Committee — as it meets to consider budget fixes. They want lower taxes and consistent tax policy.
The small business committee held the hearing Thurdsay to discuss “individual tax reform” for small businesses. According to statistics provided by the committee, 95 percent of small businesses file their taxes as individuals.
Rep. Joe Walsh, a Republican on the committee, asked the business owners assembled: “When it comes to this issue, tax reform and specifically how it impacts pass through entities, what’s one word of caution or one word of advocacy — what would you advocate for if you had a moment or two in front of the super committee?”
“Lower taxes and also certainty,” said Stephen Capp, President and CEO of Laserage Technology Corporation in Waukegan, Illinois. “There’s a lot of things that we aren’t doing because we’re not sure what the next tax codes are going to be. I mean, just lower taxes and put some certainty in it so we know what we have to do and know where we have to go.”
“The problem we have is uncertainty,” agreed William R. Smith, President and CEO of Termax Corporation in Lake Zurich, Illinois. ”We would like for years and years of consistency.”
“It’s the uncertainty and not being able to plan,” echoed Gary Marowske, President of Flame Furnace in Warren, Michigan. “It’s the same thing. It’s not knowing what’s going to happen when you’re doing one thing one year and one thing the next year.”
“About 95 percent of U.S. businesses, and over 80 percent of small firms, are organized as pass-through entities, which pay taxes on their share of the profits on their individual income tax returns,” said Rep. Walsh. “These firms account for 54 percent of all U.S. business net income, and employ 54 percent of the private sector workforce. Pro-growth policies, including tax reform, will allow them to create jobs and grow. Our local small businesses, not the government, are the ones that are going to create jobs and pull us out of this recession.”