Given their collectively big role in the economy, small businesses should benefit as much — if not more — than corporations from efforts to reform taxes.
While debate has focused in part on corporate tax rates and the potential for lower rates to make U.S. firms more competitive in the global marketplace, there are other numbers to consider:
According to the latest information compiled by the U.S. Small Business Administration, firms with fewer than 500 employees account for 99.7 percent of all firms in the United States end employ 49.2 percent of the private work force. By the way, those proportions are nearly the same in Colorado, where nearly 600,000 small businesses in the state account for nearly all businesses and employ a total of 1.1 million people, or almost half the private work force.
Small businesses account for 64 percent of net new jobs nationally and in Colorado created more than 51,000 jobs in the last year for which numbers are available.
Speaking of the global marketplace, small businesses account for 33 percent of the value of exports nationally and nearly 32 percent in Colorado.
Small businesses shouldn’t have to face higher tax rates than large corporations that put them at a competitive disadvantage. But tax reform efforts shouldn’t be limited to just rates. Small businesses face a disproportionate burden in complying with tax codes and could benefit from reforms that simplify the code.
How important is that issue? According to research conducted by the National Federation of Independent Business, a small business advocacy group, five of the top 10 concerns for small business owners relate to federal taxes.
If lawmakers are actually serious about tax reforms that will promote economic growth and bolster job creation, they’ll consider policies that benefit small businesses and recognize their collectively big role.