12/06/2006
SBA report says high tax burdens drive away entrepreneurs
The Small Business Association's Office of Advocacy recently released findings of a study showing state tax policy has an effect on entrepreneurial activity.
The study, which utilized state tax and entrepreneurship data from 1989 to 2001, confirmed what small-business owners are well aware of: "higher total tax burdens… drive away firms." The SBA reported that the states with more tax incentives for economic development tend to have more small-business owners, and found that states with higher sales tax--and therefore a lower business tax burden--show higher rates of entrepreneurship.
In addition to federal taxes, small-business owners have to contend with a bevy of state taxes such as personal income and sales and property taxes, which, according to the SBA, can prove more burdensome than federal taxes. Knowing that small businesses thrive in environments with lower taxes, NFIB continues to advocate lower tax rates--and permanent tax relief--for these businesses.
As the nation's No. 1 job creator, small-business owners need relief from skyrocketing taxes and a complex system. NFIB works to support an environment where entrepreneurs can invest in their businesses, creating new jobs and offering their employees health benefits--not in paying a disproportionate amount of taxes and a consultant to interpret the complex code. NFIB will continue to work with the state legislatures in 2007 to allow optimum growth of small businesses.
