Washington, D.C. - U.S. Senator Jim Risch (R-ID), chairman of the Senate Committee on Small Business and Entrepreneurship, today chaired a hearing entitled: “Tax Reform: Removing Barriers to Small Business Growth.” Risch's opening remarks as prepared for delivery are below.
“Tax Reform: Removing Barriers to Small Business Growth”
"Good afternoon, and thank you for joining us for today’s hearing on an issue that is critical for small businesses across the country. Having run several small businesses in Idaho, served in the Idaho legislature and as governor of my home state, I’ve continually heard the same message from small businesses when I’ve asked them what their top issues are. They’ve told me, across industry, that taxes are at the top of the list of barriers and problems they face.
"Small business owners want to spend their time growing their businesses, not taking time away from that effort to figure out how to comply with the tax code, and more often than not, hiring outside tax help to make sure they’re doing what they’re supposed to do. Here’s what we know – tax compliance costs are 67 percent higher for small businesses than for big businesses and roughly 89 percent of small business owners have to rely on outside tax preparers.
"Small businesses spend a lot of time and money that could be spent on their businesses trying to understand and comply with the law. If Congress is going to take a serious look at reforming the tax code, we certainly should look at ways it can be simplified, how compliance costs can be decreased, and permanency provided so small business owners know what rules they’re playing by, and can do so with decreased cost to their business and productivity.
"Another significant issue for small businesses is whether tax reform will reduce rates for pass through entities. Today, more than 90 percent of businesses are considered sole proprietorships or pass through entities, while more than half of business income in the U.S. is earned through small businesses identified as one of these types of businesses. When we look at these numbers, it’s clear that if we want tax reform to bring growth to our economy we must look at the individual tax code, under which pass through entities are taxed. We have to ensure that the reforms that could provide the most small business growth don’t get lost in the discussion about tax reform and that’s one of the reasons we’re here today.
"I’d like to welcome Ms. Annette Nellen, the Chair of the American Institute of CPAs (AICPA) Tax Executive Committee. This committee is the most senior committee of the Tax Division at AICPA and speaks for the AICPA on all matters related to taxation, including tax policy and legislation. She’s also a professor at San Jose State University where she teaches a number of tax-related courses and directs the graduate tax program. Ms. Nellen is a CPA herself and will bring a wealth of knowledge and expertise to our discussion about the compliance issues small businesses face with our current tax system and we’re pleased to have her here today.
"I’m also pleased to welcome Mr. Brian Reardon, President of the S Corporation Association. Mr. Reardon has, through is position with the Association, a long history of advocating for 4.6 million S corporations across the country to make sure their voices are heard when it comes to tax issues and the implications of government mandates for small businesses. He’ll be able to provide the voice of small businesses across the country, across industry and of varying sizes, when it comes to the difficulties they have with the current tax system.
"I also welcome Mr. Mark Mazur, the Director of the Urban-Brookings Tax Policy Center, who will be further introduced by Ranking Member Shaheen. Thank you for being here with us today."
The hearing will be webcast live on the committee's website, and an archived video will be available shortly after the hearing is complete.