Small Business Owners’ Concerns About Tax Reforms
Will the Trump administration be able to enact true tax reform? That remains to be seen, but small business owners likely are rooting hard for it … while keeping a watchful eye.
The National Small Business Association reports in their 2017 Small Business Taxation Survey that 1 in 3 small businesses spend more than 80 hours each year filing their federal taxes, and that nearly 60 percent of all small businesses say the administrative burden of federal taxes are worse than the actual cost of federal taxes themselves!
Clearly, we could use a change.
But no legislation is perfect, and regulatory changes often find a way of placing a new burden on businesses. Thus, small business owners also worry that tax reform could end up pushing the status quo in the wrong direction.
The following are some of the survey’s key findings, including the biggest hopes and fears of small business owners as Washington mulls tax reform:
NSBA 2017 Tax Reform Survey Findings
The Tax Reform You Want: A number of potential proposals could go through as part of new tax reform, though some would be more popular than others. The report finds that 65 percent of small business owners want reduced tax rates for corporations and individuals alike, which would come with a reduction in business and individual deductions. Meanwhile, a tax system in line with the Fair Tax has the support of 43 percent of small business owners, while 42 percent support a reduced corporate tax rate with the elimination of some business deductions. The least popular proposal is a European-style, value-added tax, at just 9 percent of small business owners.
Your Biggest Concerns: When asked about their top tax-related business concern for 2017, small business owners overwhelmingly chose “the elimination of deductions, credits exclusions or other tax benefits without offsetting reductions in my tax rate.” A high top tax rate was the biggest fear of 21 percent of respondents, 15 percent were worried about increased IRS compliance and enforcement measures, 5 percent didn’t want to see new taxation of international operations, and the remaining 16 percent were split among other concerns.
Other Findings: Some of the other survey findings of note:
- High tax rates are considered the biggest current hindrance on the global competitiveness of U.S. businesses, at 45 percent.
- A border adjustment tax is a relatively small concern among business owners, with two-thirds saying it wouldn’t affect their operations, and 18 percent unsure about any effect whatsoever. In fact, only 5 percent believed it would impact them negatively.
- Just 15 percent of small businesses think comprehensive tax reform will be enacted in 2017. That’s in stark contrast to 26 percent of respondents who are unsure when tax reform will be enacted, and worse, 32 percent that believe it will never occur.
The worst-case scenario is that the skeptics are right, and that comprehensive tax reform won’t come in 2017, 2018 or anytime in the next few years. And even if the pessimists are wrong, true tax reform will mean a host of changes that will still require you to do some deft navigating to stay within the letter of the law.
McManamon & Co. has your back in either case. We offer comprehensive tax services to small and midsize businesses that will keep your headaches to a minimum while ensuring you get the most out of the tax code. And our tax experts are constantly keeping up-to-date on the latest tax laws, meaning we’ll be able to guide you through any changes that Washington sends your way.
Don’t get bogged down by the overly complicated and onerous tax code. Get the insights and expert advice you need by calling us at 440.892.8900 or contacting us online.
Tags: McManamon & Co., small business, small business taxes, tax reform, taxes | Posted in McManamon & Co., small business, small business taxes, taxes