Opinion: Small Businesses Cast Jaundiced Eye At Tax Reform Proposals

Opinion: Small Businesses Cast Jaundiced Eye At Tax Reform Proposals

Forbes
November 28, 2017

By Frank Knapp, Jr

Co-chair of Businesses for Responsible Tax Reform and president/CEO of the South Carolina Small Business Chamber of Commerce

You hear it from politicians all the time, particularly while they are on the campaign trail: “Mom and pop shops are the heart and soul of our country. Entrepreneurship is an indelible thread woven through the American fabric. Small business owners create jobs, provide valuable services and are the cornerstones of our communities.”

But as Congress’ recently released tax plans show, these are little more than platitudes mouthed by far too many of our leaders to get elected. Lawmakers are showing their true colors by proposing a sweetheart tax cut from 35 to 20 percent –a 43 percent reduction—for corporations while doing little to help Main Street businesses.

Small business owners have taken note.

A new scientific opinion poll of nearly 800 small business owners across the country commissioned by Businesses for Responsible Tax Reform, a national coalition of small business leaders that I co-chair, shows the majority of small business owners (58 percent) feel the tax proposals being debated by Congress will favor the wealthy and corporations over small businesses and the middle class. Only 34 percent of small business owners support the tax bill, while 51 percent oppose it.

Clearly, small business owners are casting a jaundiced eye toward the tax plan, and when you look at our poll results it’s no surprise why:

  • 54 percent of small business owners reported a household income under $100,000
  • 82 percent use the state and local tax deductions that would be eliminated or capped under the plans
  • 62 percent of small business owners use the mortgage interest deduction, which would be capped under the House plan
  • 45 percent use the home office deduction that would be eliminated
  • 53 percent say they do not like that these deductions would be capped or go away altogether (just 38 percent think it’s a good idea)

Adding insult to injury, corporations would continue to be able to write off state and local tax deductions, while the owners of pass-through entities—the vast majority of all small businesses—would not, drawing stiff opposition from 69 percent of small business owners. And the coup de grace: any tax cuts pass-through businesses get in the Senate version phase out in 2025—a fact that 58 percent of small business owners dislike.

It’s no wonder that 52 percent of small business owners say that current tax proposals favor large corporations and just 24 percent say the tax proposals put them on a level playing field with big corporations.

https://www.forbes.com/sites/groupthink/2017/11/28/small-businesses-cast-jaundiced-eye-at-tax-reform-proposals/#1082891a5ba0