August 5 is typically just another quiet summer day, but 153
years ago on that date President Lincoln signed into law the nation’s first income
tax. It required every U.S. resident who earned income from property, a
profession, trade, employment or vocation to pay a 3 percent tax on income
above $800.
The Revenue Act of 1861, emergency legislation to help pay
for the coming Civil War, was immediately controversial. The House Ways and
Means chairman called it “most unpleasant” but necessary; one rural
representative argued that farmers shouldn’t have to pay while the “merchant
princes of Wall Street and all the great capitalists” would be exempt. And even
before the tax could be collected, Congress tinkered with it to rake in more
cash.
Sound familiar? It should, because U.S. tax policy for more
than a century-and-a-half has been a haphazard shell game with little attention
paid to long-term economic growth and stability – save the 1986 tax act. And
even today, although some responsible leaders in Congress are pushing for
sensible tax code improvements, their efforts are being blocked by
anti-business – and particularly anti-small business – politicians to gain an
advantage in the next election.
As a small-business owner, there is no better time than now for
you to personally make the small-business case for tax reform with your
lawmakers. As the mid-term election approaches, there will be many
opportunities for you to communicate your concerns in public forums, via emails
and by visiting lawmakers’ offices.
You don’t need to be a tax expert to share your concerns. There
is a basic lack of understanding on how small businesses pay taxes – most pay
at the individual tax rate – which is lost amongst policy makers and
Congressional staff. Sharing the message that tax reform should be revenue
neutral, feature equitable rates, and lead to a simpler code will make a big
difference. In addition, simply educating members about your business and how
you pay taxes will go a long to level the playing field in tax reform.
NFIB’s website features important, easy-to-understand summaries
of key tax issues in its Advocacy pages. There,
you can refresh your knowledge of other tax issues ranging from unfair rates to
estate tax repeal, expensing limits to erasing the alternative minimum tax and
others.
Your members of Congress must be made aware of your
concerns, not just at election time, but all year round. Fundamental tax reform
is crucial to overhauling the unfavorable economic environment in which businesses
are now forced to struggle.
Small business friendly tax reform will never be taken seriously
in Washington, D.C. without continuing pressure from people like you. Lawmakers
must recognize that simplifying the tax code and reducing tax rates is a
primary concern for small business. Arbitrary, inconsistent tax preferences,
constant political tinkering and unnecessary complexity must be replaced with a
sensible tax system that creates jobs and allows entrepreneurship.
It may seem like a challenging task, but with significant Main
Street grassroots activism and a steady drumbeat of information concentrated on
all members of Congress, we can help transform the current hodge-podge tax
system into one that encourages and promotes free enterprise.
With your unwavering support, it can be done.
