Current tax code stifles hard-working Americans
Hard-working Americans are at a disadvantage when it comes to the current tax code — especially many small businesses that are estimated to be taxed at a staggering 50 percent rate or more. Many small businesses suffer because of the way the current tax code is structured.
The complex, dual system of taxation for businesses has developed over a number of years and is now thoroughly entrenched in the code. There is a substantial difference in the way business income from pass-through entities is taxed versus the way corporate income is taxed.
Because pass-through businesses are typically sole proprietorships that are not subject to a business-level income tax, their income is taxed at high individual rates. The Tax Foundation estimates that many small businesses are taxed at a rate of more than 50 percent.
Corporate earnings do not fare any better either, as most of their income is taxed upward of 35 percent, excluding state taxes, and then again when it is paid out in dividends at a rate of up to 23.8 percent for total taxes that exceed 50 percent on a dollar of business income.
This doesn’t just hurt corporations, but it also ends up hurting American workers. A recent report by The Heritage Foundation found that 75 to 100 percent of the burden of the corporate tax falls on workers.
We need a reform that will give tax relief to small business owners and individuals being stifled under the current tax system. Click here to sign the petition urging Congress to pass legislation that makes the tax code simpler, flatter and fairer.