A new poll by Businesses for Responsible Tax Reform shows the new tax law has not helped small businesses’ profitability nor has it helped small business owners hire, grow or invest in their businesses. In fact, 65% don’t think large corporations pay their fair share of taxes and two-thirds want the 40% tax cut corporations received from the law—from 35% to 21%—to be partially rolled back to fund policies that will help small firms.
The poll of 501 small business owners nationwide who have filed or are planning to file their taxes found 48% of respondents said the new tax law had no impact on the growth or profitability of their business, and 24% said it had a negative impact. Only 19% of owners said the law had a positive impact on their business.
“Lawmakers sold this law as a boon for small businesses and their customer base—the middle class. Instead, large corporations—which didn’t need the help in the first place—reaped giant windfalls and just pocketed the cash, and the majority of small business owners have seen no impact, or in some cases, a negative impact. That’s a real slap in the face,” said Frank Knapp, Jr., Co-chair of Businesses for Responsible Tax Reform and the President & CEO of the South Carolina Small Business Chamber of Commerce, which he co-founded in 2000.
The poll, conducted March 26-27, 2019, by Morning Consult, found the vast majority of small business owners said the new law had little impact on their businesses:
- 74% said they were not able to hire new employees due to the law
- 66% said they were not able to give raises due to the law
- 64% said they were not able to pay off loans due to the law
- 67% said they were not able to invest in equipment or construction due to the law
- 56% said they did not have an easier time filing their taxes this year
“The tax provisions for small businesses are incredibly complicated and the benefits are insignificant and temporary—which is why small business owners aren’t seeing any benefits, or in some cases, are actually paying more,” said Businesses for Responsible Tax Reform Co-chair Anne Zimmerman, a longtime small business CPA who founded and owns Zimmerman & Co. CPAs Inc., which has offices in Cincinnati and Cleveland. “Our tax code should support and reward the entrepreneurs who create half this country’s jobs, not hold them back.”
Six in 10 respondents said corporations benefited the most from the law, while only 9% said small businesses benefitted most, and 53% believe the current tax code favors large businesses over small ones.
The poll found that tax policies small business owners support include making the first $25,000 in profit for a small business tax-free, simplifying the tax code, giving small businesses some relief on payroll taxes and equalizing the tax savings rate between small pass-through businesses and corporations.
Of note, 35% of respondents identify as Republican, 34% as Democrat and 32% as independent, and more respondents voted for Donald Trump (38%) over Hillary Clinton (36%) in the 2016 election.
For the full report click here.