Walsh Urges Tax Simplication for Small Business

A press release from Congressman Joe Walsh:

Graves & Walsh Letter: We Need Common Sense Reforms

to Simplify Tax Code for Small Businesses

Joe Walsh speaks to high school students on a long ABC news report.

WASHINGTON, D.C.— House Small Business Committee Chairman Sam Graves (R-MO) and Subcommittee on Economic Growth, Tax and Capital Access Chairman Joe Walsh (R-IL) yesterday sent a letter to House Committee on Ways and Means Chairman Dave Camp (R-MI) and Ranking Member Sander Levin (D-MI) to push for common sense reforms to simplify the tax code for small businesses.

This includes individual tax reform as well as corporate tax reform, since the majority of small firms are ‘pass through’ entities that are subject to individual rates.

Yesterday, the House Small Business Committee held a hearing to examine the complexity of the current tax code and find solutions that will enable small businesses to thrive instead of being crippled by unnecessary burdens. Click here to read more about the hearing.

Graves and Walsh wrote, “We need to do more to help small firms. As we near Tax Day, there seems to be broad agreement that the tax code is too complex.” They went on to say, “At the hearing, the witnesses agreed that tax complexity or tax relief has a direct impact on small business viability and job growth. The more time and resources a small business spends on tax compliance, the less time it will have to grow and hire employees… We hope you will work to enact common sense reforms that will simplify our tax code and enable our nation’s small businesses to create jobs and spur investment in our economy.”

Full text of the letter:

Dear Chairman Camp and Ranking Member Levin,

Our nation’s economy is gaining strength, and America’s small businesses are beginning to hire. The recent rise in employment is positive, but the rate of increase is slow and the labor market is still soft. We need to do more to help small firms.

As we near Tax Day, there seems to be broad agreement that the tax code is too complex. That complexity impedes compliance, as well as hiring and investment.

Today, the House Committee on Small Business held a hearing on how tax complexity hinders small business job creation and economic growth. We heard testimony from Nina E. Olson, the National Taxpayer Advocate, and several small business owners. As you may know, in her December 2010 report to Congress, Ms. Olson cited tax complexity as the number one problem in tax administration. She has said that there have been over four thousand changes to the tax code in the past ten years; an average of more than one per day, and there were an estimated 579 changes to the code in 2010 alone.

We are concerned that tax complexity increases the time and money small business owners must expend to comply with the code. Small business owners who can’t afford expensive tax advice must navigate the code on their own. Those who can afford outside help could be using those scarce resources instead to raise wages, hire more employees or expand their businesses.

As you know, the majority of small businesses are organized as “pass through” entities, so they pay taxes at the individual rate. It is important to small businesses that tax reform includes lower individual as well as corporate rates. Otherwise, small business owners, our nation’s premier job creators, will be left out of the debate and the benefits of good tax policy.

Two new studies highlight the hazards of reforming tax policy for larger businesses without doing the same for smaller ones.

  • A study by Ernst &Young for the S Corporation Association estimates that small employers would be facing sharply higher tax rates on a significantly broader base of income if Congress passed corporate-only reform.
  • A study by American University’s Kogod Tax Center similarly found that if corporate-only reform moves forward, small businesses will end up with an increased tax burden, and only comprehensive business tax reform would ensure small business owners needed tax relief.

At the hearing, the witnesses agreed that tax complexity or tax relief has a direct impact on small business viability and job growth.

The more time and resources a small business spends on tax compliance, the less time it will have to grow and hire employees.

In her testimony, Nina Olson cited a University of Maryland and Center for Economic Studies study for the U.S. Census Bureau, which found that small businesses are generally the creators of most new jobs as well as the employers of about half of the private sector workforce.

Ms. Olson testified that “it is essential that the tax system does not present an unnecessary hurdle to the success of these already fragile operations. In addition, because a substantial portion of businesses are pass-through entities, a real reduction in complexity will not occur unless individual and corporate tax reform occurs at the same time.”

Monty Walker, a CPA who serves small business clients in Wichita Falls. Texas. testified that “[u]nderstanding tax matters is confusing and tax compliance comes at a cost. This cost results in lost resources that could have been used for business operations and business development.’ Mr. Walker also said that because of the code’s complexity some small business owners decide to “just stay small and not hire people as opposed to expanding and becoming exposed to regulatory compliance brought on by hiring people.”

Steven Strobel, Executive Vice President and Chief Financial Officer of Bluestar Energy in Chicago, Illinois, encouraged Congress to “implement real tax reform: simplify the tax code, broaden the base, lower all individual and corporate tax rates, and make the corporate tax code more competitive for U.S. businesses. These reforms will create a surge in economic growth.”

In addition, Mr. Strobel said, “efforts to reduce the regulatory and administrative burden on small businesses must focus on overall simplification, eliminating inequities within the tax code and enhancing taxpayer education and outreach.”

Leading up to Tax Day, and as you continue your hearings on fundamental tax reform, we hope you will work to enact common sense reforms that will simplify our tax code and enable our nation’s small businesses to create jobs and spur investment in our economy.

Sincerely,
Sam Graves, Chairman, House Small Business Committee

Joe Walsh, Chairman, Subcommittee on Economic Growth, Tax and Capital Access


Comments

Walsh Urges Tax Simplication for Small Business — 5 Comments

  1. Joe Walsh is doing a superior job! At the very least, he is putting in the hours with ‘The Folks” here at home. The very people who elected him.

    In recent months, via the NW Herald (I choke when I have to write those letters to make a word) our little town of “Sesame Street” and I, “Big Bird” as official Mayor, have become relevant to McHenry County.

    The hamlet of “Sesame Street” has been following Congressman Joe Walsh and we are pleased to make our official announcement, as follows:

    As Mayor of “Sesame Street” I, “Big Bird” in my official capacity as its Mayor and as its most “Prolific Conspiracy Theorist,” hereby “Conspire” with my fellow citizen’s, in declaring Congressman Joe Walsh, our official “Village Hero.”

    Congressman Joe Walsh has given “Hope” and has created excitement amongst even our most skeptical citizen, “Oscar.”

    To honor our “Village Hero,” a special blog site will be forth coming geared specifically to show all of Congressman Joe Walsh’s accomplishments on behalf of his constituency.

    The village board of “Trustees” of “Sesame Street” wish to thank Cal Skinner and other local bloggers for keeping our village up to date on our “Village Hero’s” good deeds.

    Especially “Oscar” since he has no television in “The Can!”

    Seeing how hard Congressman Walsh is working and keeping in close contact with we, “The People,” it is possible even “Oscar” has a chance at a bright future.

    Stay tuned for our new sites web address soon to follow.

    Signed, The Proud Mayor of “Sesame Street,”

    “Big Bird”

    PS. “Mr. Ed,” has asked me to give a big “Shout Out” to Congressman Walsh. “Mr Ed” loves Congressman Walsh and states, “Thing’s have never been so good around the farm since Joe Walsh has taken over the ‘reign’s!’

    More fun to follow……Joe Walsh has inspired an entire ‘village’ with his wonderful, upbeat, let’s “Git R Done” attitude. We applaud you and appreciate you Joe!

  2. BigBird…you been hanging around the chicken coop too long and snorting the feces dust. While you in McHenry might be happy he is showing up in the district all of the time (probably because it is the only time he gets a good night’s sleep), at time in history our elected officials need to be rolling up their sleeves and getting to work to fix the challenges facing the legislature. Yes it is good to talk with constituents, but very few of us have solutions.
    I have seen a growing trend though. Rep Walsh praise almost always comes from McHenry County people and those who really question what he is doing come from Lake and Cook County.
    Perhaps the re-mappers will see this and get Lake County and Cook County out of his district.

  3. We still haven’t heard the words that they should be saying:

    That they are working on Recinding NAFTA and getting rid of No Child Left behind because it is still not funded by the Feds.

    We are so done giving away jobs to 3rd world Countries.

    We are becoming the working poor.

    Example Korean deal.

  4. Lake County is extremely happy to have a man who steps forward in faith to lead as envisioned by the designers of the current representative system. The Congressional Representative Joe Walsh remembers his power and his job derive from his connection to and representation of The People. The Senate may feel free to be a little more distant but as for Mr. Walsh he is absolutely remembering who is important. If you want to see Mr. Walsh in Cook County please let him know where may be a good spot and Joe will be happy to show up to hear your derision or support in person.

  5. At least Congressman Walsh appears to be trying his level best to listen to those who elected him to represent them.

    I think we should support his effort and give him some breathing room, unless and until he does something that would show any serious error in judgment.

    You know what they say about sleeping with dogs……? Perhaps the Congressman is keeping himself, “Flea Free” by not sleeping with those who might serve to ‘clone’ him…

    I’ve never met the Congressman, but, from what I see on Cal’s blog and in the press, Joe Walsh is at least ‘working.’

    For that, we in the village of “Sesame Street” are grateful and willing to withhold any negative judgment.

    PS. We have a village ordinance against “Chicken Feces” on village roads. We scoop it up every night, and dump it on “Oscar”….. and he is loving it!

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