Strengthening the Economy and Increasing Wages by Making the Tax Code Simpler and Fairer for America’s Small Businesses
On March 12, Ways and Means Committee Chairman Dave Camp (R-MI) released a third discussion draft as part of the Committee’s broader effort on comprehensive tax reform that significantly lowers rates while making the tax code simpler and fairer. The third draft is specifically focused on reducing the burden the tax code imposes on small businesses.
With about half of the private sector workforce employed by a small business – a total of nearly 60 million Americans – every dollar spent on complying with an overly complex, burdensome and broken tax code is a dollar that cannot be used for investment, hiring and higher wages for American workers. The discussion draft contains several core components that simplify tax compliance for small businesses and provide certainty with respect to the ability of small businesses to recover certain costs immediately. These include widely supported reforms such as permanent section 179 expensing and expansion of the “cash accounting” method, amongst other provisions. The discussion draft also includes two separate options designed to achieve greater uniformity between S corporations and partnerships – one that revises current rules and a second that replaces current tax rules with a new unified pass-through regime.