Buchanan Introduces Small Biz Tax Cut Bill
Bill Puts Small Businesses on Equal Footing with Corporations
WASHINGTON – U.S. Rep. Vern Buchanan, R-FL, today introduced the Main Street Fairness Act to ensure that small businesses – which account for 94 percent of all businesses in America – never pay a higher tax rate than large corporations.
“Local mom and pop stores and medium-sized businesses should not be burdened with a higher tax rate than multinational corporations with billions of dollars in earnings,” said Buchanan, a senior member of the tax-writing House Ways and Means Committee. “America has the highest corporate tax rate in the developed world – and small businesses face even higher rates.”
Buchanan’s bill is co-sponsored by Rep. Charles Boustany, R-LA, chairman of the Ways and Means Tax Policy Subcommittee. “This act simplifies the code for small businesses and gives them the confidence they need to invest and provide more jobs for American families. I am proud to be an original sponsor of this legislation,” Boustany said.
The businesses that would be helped by Buchanan’s plan account for more than 68 million jobs.
A broad coalition of prominent business and tax reform groups expressed their support for the measure, including the National Association of Manufacturers, Associated Builders and Contractors, the National Retail Federation, Americans for Tax Reform, the Florida Chamber of Commerce and Florida TaxWatch.
The Main Street Fairness Act will establish that businesses that file taxes as passthrough income, such as sole proprietorships, partnerships, LLCs and S corporations, will never pay a higher rate than a corporation. Under current law, corporations pay a maximum tax rate of 35 percent, while small business owners pay up to 39.6 percent under the individual income tax code on top of additional taxes on earnings and investments. These small businesses pay more than 50 percent of their income in taxes in some states; in Florida, they face an effective tax rate of 42.6 percent according to the Tax Foundation.
Buchanan’s bill would not add to the debt, according to Dominic M. Calabro, President and CEO of Florida TaxWatch, the state’s premier, non-partisan taxpayer watchdog for more than 35 years. “Congressman Buchanan’s Main Street Fairness Act should lead to greater national economic growth and result in more tax revenue for the government, not less, in the long term,” Calabro said.
Buchanan said it was essential that small businesses do not get left behind as Congress considers major tax reform proposals. “The goal of tax reform should be to boost the economy and create more American jobs,” said Buchanan. “Even President Obama has called for reducing our corporate tax rate, but merely reducing the tax burden on corporations does nothing for more than 90% of American businesses.”
A number of prominent business and pro-growth groups have expressed their support for the measure.
National Association of Manufacturers: Carolyn Lee, senior director for tax policy, said that the bill is “a viable plan for reducing taxes on passthrough businesses that can be part of a larger tax reform effort.” Lee also noted that Buchanan’s bill presents “potential solutions to difficult questions in the tax reform discussion.”
Associated Builders and Contractors: Liam Donovan, director of legislative and political affairs, said “Congressman Buchanan’s Main Street Fairness Act makes crucial strides by restoring rate parity between small business and the Fortune 500. With contractors already facing the highest effective tax burden of any industry, construction can ill afford a perpetual fiscal handicap on 94 percent of firms employing more than 60 percent of its workforce.”
Americans for Tax Reform: Grover Norquist, president, said “This important change helps ensure that businesses are on a level playing field for decades to come. A key goal of tax reform should be taxing businesses equally, not discriminating based on arbitrary laws, and Congressman Buchanan’s legislation ensures this becomes reality. Members of Congress should have no hesitation supporting and co-sponsoring this pro-taxpayer, pro-small business legislation.”
See Americans for Tax Reform’s full blog post on the Main Street Fairness Act here.
National Retail Federation: David French, senior vice president of government relations, said “As Congress addresses the corporate tax rate issue, it is essential that they recognize that the majority of American businesses, including retail businesses, report through the individual side of the tax code and that a tax reform solution must provide a level playing field for these smaller businesses. We believe that your bill, the “Main Street Fairness Act” takes an important first step in examining a fair solution for small businesses in the context of overall tax reform.”
Florida Chamber of Commerce: David A. Hart, executive vice president, said “This important legislation ensures these job creators are extended the tax relief necessary to remain competitive.”
Congressman Buchanan has a strong track record of creating jobs in the private sector. For over 40 years, Buchanan has operated a number of businesses in multiple states and has employed thousands of people.
Buchanan also has particular experience with the challenges passthrough businesses face. He chaired a Ways and Means small business/passthrough tax reform working group during the 113th Congress under then-Chairman Dave Camp.