Taxing Small Business is Big Business

Grow Employment By Small Businesses With Revenue Neutral Tax Incentives. Many small businesses would benefit by hiring new employees. However, they either can’t afford new hires or are afraid to bring on new people in the face of uncertainty. As is know to mitigate these risks many have resorted to using contractors or overseas outsourcing. I believe that in recent years, tapping low wages in other countries has been a major contributor to the worst labor participation rate in the United States in over 40 years. Let’s put the unemployed in our inner cities back to work.

I propose that we offer any employer, who hires someone that is unemployed for 1 year or more, a direct tax credit equal to what the new employee will pay in Federal and State income Tax, to continue for the number of years that the person has been unemployed. 

This will effectively reduce labor costs for small business employers and thereby making outsourcing less attractive and encourage companies to take a risk on hiring. The tax credit offsets will enable a small business to afford temporary lower productivity while training inexperienced new workers. The added societal benefit is putting people back to work while eliminating the costs associated with the benefits the chronically unemployed had been receiving.

Reduce the S Corp & LLC Tax Rate to 15% 

Small Business Owners are the most heavily taxed people in the country. Sad to say but the United States penalizes entrepreneurship while we should be encouraging it. The Small Business Owner has to work harder and make more to clear the same after tax dollars as their employees. The entrepreneur must pay part of each employees FICA tax, potentially make employer healthcare contributions, potentially pay gross receipts tax, licensing fees and other related tax burdens. Consistent with the President vision, I would incentivize people becoming entrepreneurs by reducing the Federal Income tax for S Corps & LLCs to the same 15% proposed for Corporations. The lower tax burden will help offset all of the employee related tax and costs the small business person incurs at present. This to will promote new investment and help grow the economy.

 

 

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