The National Federation of Independent Business (NFIB) is backing legislation that would lower taxes on small businesses.
The group, which advocates on behalf of small businesses, leant its support to a bill introduced earlier this year by Rep. Vern Buchanan (R-Fla.).
"We are grateful to Congressman Buchanan for introducing the Main Street Fairness Act, and we strongly urge that it become a central feature of comprehensive tax reform in the next Congress,” NFIB president and CEO Juanita Duggan said in a news release Friday.
Small businesses are usually not corporations and instead tend to be "pass-through" businesses whose income is taxed at individual income tax rates. The corporate tax rate is currently 35 percent, while the top individual income tax rate is 39.6 percent.
"The high tax burden currently facing small businesses holds back investments, growth, hiring, and entrepreneurship," Amanda Austin, NFIB's vice president for government relations, wrote in a letter to Buchanan.
Buchanan's bill would lower taxes for pass-through businesses that pay a rate of more than 35 percent, and it is designed to make sure that small businesses don't pay higher tax rates than corporations in the future.
The House Republicans' tax-reform blueprint states that it "will build on concepts" Buchanan developed in his bill. Under the blueprint, the top rate for individuals would be 33 percent, but the top rate for pass-through businesses would be 25 percent. That's closer to the blueprint's 20-percent corporate rate.
Staff members on the House Ways and Means Committee are working to create legislation based on the tax-reform blueprint. Earlier this week, Buchanan urged congressional leaders to give small businesses "serious attention" while Congress works on tax reform.
“The time is right for Washington to pass a tax reform package that grows our economy and unleashes the power of small businesses,” Buchanan said Friday. “It’s absurd that small businesses face a higher tax rate than ExxonMobil. We have to level the playing field as part of tax reform.”
