Although federal over-regulation has been a growing hurdle for small businesses, the message from our Small Business Committee hearings has been that tax issues are the single most significant set of regulatory burdens for most small firms, and a recent NFIB Research Foundation study found that four of the top ten small business problems were tax related.
Small firms pay 67% more to comply with the tax code than larger firms. Not only does tax complexity weigh especially heavily on small employers, who don’t have the time or resources to hire professional administrators, but over 70% of small businesses file their taxes as ‘pass through’ entities. In other words, small business owners file their firms’ taxes under their own personal return. Surprisingly, the current administration wants to increase taxes on individuals earning over $ 250,000 a year, which would include small business who file their taxes as ‘pass-through’ entities. Any increase in the level of already crippling taxes would make it that much harder for small business owners to make payroll, let alone hire any new employees.
The Administration’s anti-business policies are creating a hostile and uncertain environment for our nation’s best job creators. That is why my fellow Small Business Committee Members and I have dedicated this week to sitting down with small companies in our districts and listening to what they have to say about the state of their business. Yesterday, I held a listening session in Schaumburg, Illinois, and I will hold three more listening sessions throughout this week in my district in northern Illinois. It’s time small business owners are not only heard, but also given an environment in which they can succeed.
The plight of small businesses in Illinois’ 8th district, coupled with entrepreneurs deafening cry for relief begs a very clear conclusion. The government needs to shift its focus from placing unnecessary barriers and check points along the path and allow small businesses to pave the way to innovation, economic growth and job creation.