Speaking at a Tennessee Amazon.com distribution facility last week, President Obama outlined a plan to lower the corporate tax rate from 35 percent to 28 percent, and institute a special 25 percent rate for manufacturers. His captive audience cheered, but it didn’t take long for small business leaders see through this charade as just another piece of window dressing to give the Administration cover to pick more winners and losers.
Unfortunately for substantially all Colorado small businesses, which represent 97.6% of the employers in the state, this proposed tax change has no impact. To make matters worse, Obama has actually raised tax rates for individuals, and the income from most of these small businesses simply flow through to individual tax returns of the business owners. Under Obama’s proposal, multinational corporations and large manufacturers make out huge, but the small businesses that drive a significant part of the growth and job creation see no benefit.
Tony Gagliardi, who serves as the Colorado state director for the National Federation of Independent Business, was quick to answer Obama’s latest faux olive branch to the state’s job producers:
“In the past year there has been a growing consensus in Washington and on Wall Street that we need corporate tax reform,” said Gagliardi. “We don’t disagree, but that’s not comprehensive reform. It helps the biggest, most profitable corporations but it excludes the Main Street businesses that provide a majority of jobs in the United States.”
The NFIB has been working on a more meaningful proposal, one designed to lower effective tax rates (the rate that is actually paid, not the headline rate that is then manipulated by numerous loopholes) for all businesses, not just large businesses and manufacturers. The Colorado Retail Council and NFIB – Colorado are both local members of this group, committed to reform the tax code to broaden the tax base, lower effective rates, and enhance job creation, economic growth, and competitiveness, ends that seem to be incomparable with the messy and complicated proposals put forth by by national and state Democrat leaders.