St. Paul (July 30, 2013) -- The National Federation of Independent Business (NFIB) today reacted to news that President Obama would pitch a “grand bargain” with Congress, under which corporate tax cuts would be coupled with federal spending projects as a way to spur economic growth.
“More than ninety percent of employers in Minnesota are small businesses and most of them pay the individual income tax,” said NFIB State Director Mike Hickey. “We like that the President sees the need to cut business taxes but this proposal would exclude most businesses in Minnesota.”
At an event today in Tennessee, the President asked Congress to cut the corporate tax rate from 35 percent to 28 percent and create a special 25-percent rate for manufacturing. The United States imposes a higher corporate tax than most of the rest of the world, a burden that many experts believes creates an incentive for corporations to create jobs overseas and keep their profits off shore.
“In the past year there has been a growing consensus in Washington and on Wall Street that we need corporate tax reform,” said Hickey. “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.”
NFIB last week announced a coalition of business groups focused on reducing the effective tax rate – the amount in taxes that businesses actually pay – instead of the usual debates in Washington over brackets.
“What we really need is a top-to-bottom overhaul of the entire system to make taxes lower, flatter and fairer,” said Hickey. “The current system picks winners and losers. Under the President’s plan, multinational corporations and manufacturers would be winners but most small businesses wouldn’t get relief. What we need is a climate in which all businesses can grow and create jobs and that means cutting the effective tax rate for everyone.”
For more information about NFIB, please visit www.nfib.com.