According to a tax policy expert, the current tax reform bills in Congress favor large businesses over small ones, as discussed during a telephone town hall on Monday, November 20. The Town Hall was hosted by Businesses for Responsible Tax Reform, (BRTR), a coalition of small businesses advocating for tax reform that benefits small business owners. The coalition was launched on November 14.
The U.S. House of Representatives passed its tax reform bill on Thursday, November 16. The Senate is expected to vote on its version following the Thanksgiving week recess, as reported by CNN.
The town hall featured Michael Linden, a tax policy expert and Roosevelt Institute Fellow, who was the former senior policy adviser to Sen. Patty Murray (D-WA) on the Budget and Health Education Labor & Pensions committees. Linden has also served as the managing director for economic policy at the Center for American Progress. During the telephone town hall, he detailed what the current tax reform proposals mean for small business owners.
Linden told participants that “there is not a lot for small businesses to be excited about” in either the House or Senate tax reform bills. He noted that both bills provide large tax cuts to large corporations, and, he stated, they do not focus on helping the nation’s job creators — small businesses.
Linden said he believed that the playing field is already tilted against small businesses and the tax reform will only increase that inequity with the tax breaks provided larger businesses. In the reform bills, corporations see a tax break from 20 to 35 percent, which, Linden argued, come at the expense of small businesses. For instance, while corporations will still be able to deduct state and local taxes on their profits, the owners of small pass-through businesses will not. In the House plan, proposals would eliminate or cap deductions that middle class small business owners rely on, including for home office expenses, tax preparation, state and local taxes, and mortgage interest.
Moreover, 50 percent of all households will pay more in taxes by 2027, Linden said, and that will affect consumers, who will have less to spend due to a higher tax bill. And, importantly, though many Republicans had promised to simplify the tax process, Linden believes that the tax reform bills “contain no simplifications at all and, in some cases, it will be more complicated for small business owners to file their taxes.”
Businesses for Responsible Tax Reform is led by co-chairs Ron Busby, president of the U.S. Black Chambers Inc., and Frank Knapp Jr., president of the South Carolina Small Business Chamber of Commerce.
“If the 2016 election was a referendum on the economy, then lawmakers should have job creation top of mind, and with it small businesses,” said Busby in a press statement. “Common sense reforms to our nation’s outdated tax code would be a step in the right direction. Unfortunately, the proposals under consideration aren’t a boon for small business, they’re a bust.”
At the Town Hall, BRTR stressed that the coalition is circulating a sign-on letter it plans to send to members of Congress stating the current tax reform proposals disproportionately help large businesses and do little to level the playing field for the bulk of small businesses.