This is not a tax on the wealthy, but a tax on middle-income small business owners
HARTFORD, May 31, 2019 – NFIB, a small business association representing thousands of small and independent businesses in Connecticut, is adamantly opposed to the plan to raise taxes on pass-through companies. Most small businesses fit that description because they are LLCs, sole proprietorships, Partnerships, and S-corps, and their business taxes “pass through” on their personal income tax form.
Last year, the legislature created a new tax on pass-through entities with an offsetting income tax credit intended to alleviate federal caps on state and local tax deductions. Small business owners were supposed to be made “whole” or “held harmless” through this change. Now, in a rush to finish a budget, some lawmakers are looking at increasing the taxes on pass-through entities so they can fill a budget hole.
“Claims that a tax hike for pass-throughs will only impact the wealthy are entirely wrong,” said Andrew Markowski, state director of NFIB in Connecticut. “Most small business owners are middle-income earners, and the vast majority of their businesses happen to be structured as pass-throughs. So, any increase in this tax impacts them in a very negative way because they make plans based on their predicted costs.”
“Small business owners often are the ones who help keep the local economy vibrant and this higher tax endangers that,” added Markowski. “They hire your friends and neighbors and contribute to local charitable causes. Why would the legislature ever choose to impose these additional costs on the backs of small business who employ half the working population in our state?
“This tax change comes only a year after the PET was first levied and small biz owners can’t keep up with all the changes and uncertainty coming out of Hartford and they wonder what else will knock them over the head.”
Andrew Markowski
NFIB’s Connecticut State Director
[email protected]
