CHICAGO -- The House Committee on Ways and Means is studying proposals to ease the burden of federal tax law compliance on small businesses, and the National Automatic Merchandising Association encourages industry members to make their voices heard.
Rep. Dave Camp (R-MI), who chairs the committee, said that a measure providing this relief is important, as it would allow small businesses "to spend less time filling out forms and more time creating jobs.
"The current patchwork of complex rules is very difficult to navigate, and really leads to a disparate tax treatment," Camp continued. According to the National Federation of Independent Business, tax compliance costs are 65% higher for small businesses than for big businesses, costing small-business owners $18 billion to $19 billion a year. With about half of the private sector workforce employed by a small business -- a total of nearly 60 million Americans -- these costs, along with tax rates as high as 44.6%, are especially burdensome for a sector that has long been responsible for leading the nation out of economic downturns, NAMA pointed out.
The House Ways and Means Committee therefore is soliciting comments from stakeholders on two options, one that revises current tax rules and a second that replaces these rules with a unified pass-through regime. The first approach would revise rules pertaining to Subchapter S and Subchapter C corporations, as well as partnerships. The second would repeal Subchapter K and Subchapter S in current law, and provide a simple, uniform set of rules applying to non-publicly traded businesses for federal tax purposes without regard to the way a business is organized at the state level. Details may be at waysandmeans.house.gov/taxreform.
"NAMA supports comprehensive tax reform that benefits small business. In today's increasingly competitive business environment, it's important that policymakers continue to move forward in a pro-growth, pro-small business tax system," said Eric Dell, the association's senior vice-president of government affairs. "We encourage our members to offer comments to the committee to help shape the debate moving forward and to have their voices heard on this important issue."
Comments on these alternative proposals for tax reform are to be submitted by April 15. They may be sent by email to firstname.lastname@example.org
, and will be included in the final Joint Committee on Taxation report that is slated for delivery to the Ways and Means Committee on May 6.