Half-A-Million Strong Coalition Calls for Fair Tax Reform [AUDIO]
A lot of times when there are federal tax code changes the big corporations get help, but the mom-and-pop shops do not.
That's according to Laurie Ehlbeck, New Jersey director of the National Federation of Independent Business (NFIB) which has joined the 'Coalition for Fair Effective Tax Rates.' The group collectively represents about 500,000 businesses.
Eighty-percent of the businesses in New Jersey and across the country file their tax returns as individuals which means they often don't get much benefit from tax breaks and credits.
"Often when there are changes in the tax code if helps larger businesses, but small businesses don't actually get any help," says Ehlbeck. "Any time it costs more to run your business, you're going to have to make some type of change. Often that means letting someone go or giving them fewer hours, but more often it means maybe not hiring that extra person."
Coalition members agree with the tax-writing committee chairmen on Capitol Hill that the federal tax code is broken and comprehensive tax reform is needed. They feel eliminating tax preferences will allow lawmakers to lower corporate and individual tax rates to promote economic growth and job creation.
"High effective tax rates harm the economy and discourage job creation," says Dan Danner, president and CEO of NFIB and co-chair of the Coalition. "By putting effective tax rates front and center for policy makers, they can focus not on the tradeoffs but on the bottom line - the percentage of income that businesses pay in taxes, also known as the effective tax rate."
The Coalition plans to ask members of Congress and Obama administration officials to use effective tax rates as the key measure of success as tax reform develops In Washington.
Its members hope effective-tax-rate comparisons will bolster legislation that broadens the tax base while lowering rates for corporations as well as pass-through businesses. The Coalition also wants to impress upon lawmakers and key stakeholders that high effective tax rates have negative consequences for American businesses and the overall economy.
"The complexity of the tax code creates winners and losers and small businesses are usually the losers," says Ehlbeck. "Tinkering with the corporate and individual rates without reducing the actual tax burden for small businesses would do very little to improve our competitiveness."