This is a Chicago-centric complaint, but it resonates nationally.
One of the beefs small businesses have with government is the level of taxation they face. For every tax break that’s unveiled with great pomp and circumstance, there’s ten taxes those businesses still have to pay in full. It’s a real dilemma.
The suggestion proposed by the Chicago Tribune is both straightforward and simple, which is probably why it hasn’t caught on universally. The suggestion is this:
Small and medium-size businesses are vital to Illinois’ economic recovery and are the vehicles that support entrepreneurship and innovation. Why should a local business have to pay a tax that a massive corporation is essentially exempted from? I am not criticizing the corporations that call Illinois home, rather the fundamental unfairness of deeming our smaller firms unworthy of similar tax relief. Instead of rushing to provide special deals for our largest corporations, we need to focus on supporting all our struggling businesses by lessening the regulatory and tax burden across the board. The easiest way to attract business is to lower taxes.
Now, I don’t know if it’s even remotely possible to pass a tax exemption targeted at the hundreds of thousands—if not millions—of small businesses that exist in the U.S. today without completely bankrupting state and federal governments. That’s something that dudes with degrees in economics can study and tell you. I also don’t know if it’s possible to slash taxes across the board for small businesses, though I think it’s worth exploring.
The larger issue is that whether or not tax cuts will help, small businesses are tired of seeing huge, multi-billion corporations pay no taxes while they pay their fair share and then some. This is what the editorial in the Tribune gets at, a sense that there is something fundamentally unfair about the way the current system works. It’s about that as much as it’s about its general sort of solutions, which do bear exploration.
Do you think the large/small business tax disparity is unfair? I’d like to hear from you.
Photo credit to ctoocheck at http://www.sxc.hu/photo/441853