Survey: Small Business Owners Vexed by Tax Code, Want Overhaul
There are few things in life as certain as death and taxes – one of them being the difficulty small business owners often face when filing taxes. The challenges and grievances entrepreneurs have with the U.S. tax code were recently profiled in a survey by the National Federation of Independent Businesses (NFIB). In it, small business owners voiced their displeasure with the bureaucracy surrounding the American tax code and expressed hope for reform in the future.
Small business owners look elsewhere for tax help, not optimistic on Congressional action
Overall, of the 1,218 small business owners that responded, 85 percent either agreed or strongly agreed that there needs to be a fundamental revamping of the federal tax system within the next year.
Reducing the general complexity associated with the tax code was among the focal points of the reform small business owners advocated for; 52 percent said simplifying the tax code as a whole should be the priority. Other changes on small-business owners’ wish lists: 45 percent identified repeal of the estate and gift tax, 25 percent wanted full expensing of all business equipment and real property, another 25 percent called for no new net tax increases, 20 percent wished for repeal of the alternative minimum tax (AMT) and 12 percent wanted the double tax on corporate dividends to be eliminated.
The most common challenges encountered by entrepreneurs in regard to the tax system were inconsistent and distorted deductions, credits, and exclusions (47 percent), and compliance made more difficult by constant changes (41 percent).
Such compliance-related obstacles were also found to cost small business owners money: 91 percent reported they pay professional tax preparers because they had given up on achieving compliance through their own means.
“This survey clearly shows that small business owners believe the tax code is too complicated, too politically motivated, and inconsistent,” said Chris Whitcomb, NFIB tax counsel. “It is no wonder that more than half of small businesses believe that simplifying the tax code should be a top priority.”
Despite the pervasive call to action voiced by small business owners on the subject of tax code reform, not many felt any approach to rectifying the situation would result in substantive and lasting changes: 55 percent agreed or strongly agreed with the sentiment that fundamental tax change would not result in less complexity.
The problems many entrepreneurs face when filing for taxes is that it costs them money, with the vast majority settling for paying tax preparers to handle their finances. However, such a strategy can put some firms at risk of a cash flow crisis. In that case, small business owners can turn to National Funding for a merchant cash advance to alleviate some stress about taxes.