Buchanan Introduces Small Biz Tax Cut Bill

Press Release

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."

Source