Small business owners might not be on board with the corporate tax code reform that the White House is reportedly working on, according to the New York Times, unless it comes along with reforms to the individual tax code as well. According to the Times, this “corporate tax overhaul,” which would be the conclusion of the process begun in January by Treasury Secretary Tim Geithner, “has explored the willingness of business leaders to sacrifice loopholes in return for lowering the top corporate tax rate, currently 35 percent.” That tax rate could be reduced to as low as 26 percent.
“Our members are definitely in support of reforming the tax code,” said Molly Brogan, vice-president of public affairs for the National Small Business Association. But, she added, “doing it at the corporate level doesn’t do a lot for most businesses. You have to reform the individual tax code as well.”
According to the NSBA’s data, 83 percent of small businesses are set up as pass-through entities, meaning that their business income counts as personal income, so “that’s where they pay taxes, at the individual levels,” explained Brogan.
“Without addressing individual incomes and reforming those, you’re going to miss the majority of small businesses,” she said.