Albany (July 23, 2013) – A new group called the Coalition for Fair Effective Tax Rates announced today that it would work to persuade lawmakers, opinion leaders and the public to view tax reform through the lens of effective tax rates, the amount in taxes that businesses actually pay.
“The complexity of the tax code creates winners and losers and small businesses are usually the losers,” said Mike Durant State Director for the National Federation of Independent Business (NFIB). “Tinkering with the corporate and individual rates without reducing the actual tax burden for small businesses would do very little to improve our competitiveness.”
The Coalition – collectively representing about 500,000 businesses – is a diverse organization whose members include a wide range of businesses from large corporations paying corporate rates, to small mom-and-pop shops paying individual tax rates. All agree with the tax-writing committee chairmen on Capitol Hill that the federal tax code is broken and comprehensive tax reform is needed. Eliminating tax preferences will allow lawmakers to lower corporate and individual tax rates to promote economic growth and job creation.
“High effective tax rates harm the economy and discourage job creation,” said Dan Danner, president and CEO of NFIB and co-chair of the Coalition. “By putting effective tax rates front and center for policy makers, they can focus not on the tradeoffs but on the bottom line – the percentage of income that businesses pay in taxes, also known as the effective tax rate.”
Coalition members plan to ask members of Congress and Obama administration officials to use effective tax rates as a leading metric – and a key measure of success – as tax reform develops on Capitol Hill. Its members hope effective-tax-rate comparisons will bolster legislation that broadens the tax base while lowering rates for corporations as well as pass-through businesses. The Coalition also wants to impress upon lawmakers and key stakeholders that high effective tax rates have negative consequences for American businesses and the overall economy.
The Coalition will take no position on any tax preference or provision. Instead, it plans to concentrate on the benefits of viewing tax reform through the lens of effective tax rates with the goal of creating a fair, neutral playing field across all industries and business sectors.
“Real tax reform, which our Coalition supports, would lower tax rates and broaden the tax base for corporations and also for pass-through entities that pay taxes on the individual rate system,” said Danner. “That kind of reform, if enacted, would spur economic growth, create jobs and improve competitiveness.”
The coalition’s management committee members are Associated Builders and Contractors, Associated General Contractors, International Foodservice Distributors Association, International Franchise Association, National Association of Wholesaler-Distributors, National Federation of Independent Business, Retail Industry Leaders Association, S Corporation Association and Small Business & Entrepreneurship Council.
Follow the coalition on Twitter, @effectiverates, and on Facebook