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| SBE Council Makes Case for Income Tax Cut
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March 22, 2005
Washington, D.C. - The Small Business & Entrepreneurship Council (SBE Council) is publishing a series of reports that lay out the case for making key aspects of the 2001 and 2003 tax cuts permanent.
The third report, written by SBE Council chief economist Raymond J. Keating, focuses on the personal income tax.
SBE Council President & CEO Karen Kerrigan observed: "Lowering the personal rate on income taxes has provided small business owners and entrepreneurs with precious capital to invest in their firms and workforce. With access to capital such a vital issue for businesses at all stages of their development, the most efficient means for meeting this need is to allow businesses to keep more of their profits through tax relief. To keep the economy growing and to allow business owners to adequately plan for their future capital needs, Congress must make these reductions permanent. "
In the report, Keating lays out both the history and the economics regarding the impact that changes in personal income tax rates have on the economy. Given particular attention is how the personal income tax affects small businesses and entrepreneurship. Keating writes at one point: "It's also crucial to understand that personal income taxes directly impact the bottom line of most businesses. According to IRS tax return estimates for 2003, 92% of businesses pay the personal income tax (for example, as sole proprietors, partnerships or S-Corporations), rather than the corporate income tax."
He concludes: "Clearly, the economy - including entrepreneurs and small businesses - benefit from personal income tax cuts. The current rate structure needs to be made permanent, thereby avoiding a large tax increase in 2011, and enhancing the potential benefits from the 2003 reductions in personal income tax rates."
The report - "Tax Cut Permanency Report #3: The Personal Income Tax" - can be downloaded at SBE Council's website at http://www.sbecouncil.org/.
SBE Council can be contacted at 202-785-0238. For over ten years the SBE Council, a nonpartisan, nonprofit small business advocacy group headquartered in Washington, D.C., has been working to protect small business and promote entrepreneurship.
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