COMMENTARY | As a small business owner, there are areas of tax reform that I feel would benefit the United States as a whole, as well as our small businesses. This country was built on the endeavors of entrepreneurs, enterprising pioneers, and profitable relationships forged with existing residents. Christopher Columbus encompasses each of those values; Queen Isabella hired Columbus, intrepid explorer, to find new markets and resources. He did that. America is now the leading financial power in the world, centuries and thousands of new businesses later.
Small business tax reform: Room to grow
The U.S. is still considered the newcomer on the block to countries who have been conducting international business worldwide for over two millennium. As such, we certainly have room for tax reforms that would benefit the entire nation. Warren Buffett, although not a small business owner, is a smart businessman who understands that fostering entrepreneurs and small businesses allows large multi-nationals to prosper at a greater level because consumers have the money to buy the products and services offered. On that note, I agree with Dean Zerbe, national managing director at the Alliant Group and former tax counsel for the Senate Finance Committee: Fatten the research and development tax credits.
Payroll tax cut
Currently, the news has been full of the heated battle between the House, Democrats, and the Republicans to the point that the federal government had faced the possibility of shutting down. The payroll tax reform is embroiled in the entire $1 trillion federal funding bill and is facing annihilation due to the pipeline proposal and other issues in that bill. As a small business that produces Web sites and specializes in search optimization and marketing, we work with a lot of partners here in the U.S. as well as globally. We would hire more staff and create more jobs if it cost us less. With the IRS placing attention on how businesses are hiring independent contractors, our own business model is facing transition to the more expensive rout of hiring more employees.
Increased level of income brackets
I agree with Warren Buffett, not perhaps for the same reason, but because it is costly as a small business owner to hire staff. We partner with independent contractors. That means that individual personal income tax returns are going to show a lot more income. Take the burden off the already burdened corporations - we face a 35-percent rate of corporate income tax as it is, before the double taxing of capital gains and shareholder dividends.
Equal business tax
The Tax Foundation recently published a list of recommendations regarding taxes. The proposal for businesses to be taxed at the same rate regardless of size and type of entity appeals very much to me. Formed as a C-corp, our business would prefer to pay tax only once, just like S-corporations, partnerships, and farms. We are a startup and have not yet produced the volume and complexities that allow us to follow in the footsteps of one of our business role models, Warren Buffett. Large corporations have various ways of reducing their corporate tax rate, and we need to successfully tax the billionaires and give a break to small businesses, and besides, I am very fond of the idea of being able to pay 15 percent as opposed to 35 percent.
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