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NSBA today released the 2014 Small Business Taxation Survey which provides detailed insight on how America’s small-business community is being impacted by federal taxes. Complexity and inconsistency within the tax code continue to plague small businesses with nearly one-in-three spending more than $10,000 per year on the administration alone of federal taxes.
“More small businesses today say that the administrative burden of federal taxes is their key concern than say the financial burden,” stated NSBA President and CEO Todd McCracken. “Our tax system punishes work, investment, risk taking and entrepreneurship and is unquestionably broken.”
Underscoring the complexity of the federal tax code is the fact that 86 percent of small-business owners must pay an external tax practitioner or accountant to handle their taxes. Small firms ranked income taxes (the majority, 83 percent, are pass-through entities and therefore pay taxes on their business income at the individual level) and payroll taxes as the top two most burdensome taxes both financially and administratively.
The survey is being released in conjunction with a hearing of the House Committee on Small Business examining the crushing tax burden facing America’s small businesses, at which NSBA First Vice Chair Tim Reynolds will testify. In his comments, Reynolds will highlight the vast complexity outlined in the NSBA survey as well as the real-world implications of layers-upon-layers of tax rules on his firm.
“Given that 40 percent of small firms report spending in excess of 80 hours per year on federal taxes, it is no wonder that a clear majority support broad tax reform that will ease complexity by reducing both corporate and individual tax rates, coupled with reduced deductions,” stated NSBA Chair Jeff Van Winkle of Clark Hill in Grand Rapids, Michigan
Click here to download the report.