Tax Code Simplification

Date: May 03, 2016

NFIB believes that small business owners are over-taxed and tax compliance is too burdensome.  In fact, the Small Business Administration (SBA) found that the tax compliance burden is 67 percent higher for small businesses than large businesses.
 
Tax Simplification
 
Tax complexity is a problem for small businesses because spending time and money on tax compliance drains financial resources, and most small businesses lack or are unable to afford an in-house tax or finance department.  This forces small business owners to handle the task of complying or finding professional assistance from an outside accounting firm, which can be expensive.  Each year, small business owners spend nearly 2 billion hours and $18 to $19 billion complying with the tax code.  According to the SBA, the tax paperwork is the most expensive paperwork burden the federal government places on small businesses—at $74 per hour or $1,500 per employee.
 
The tax gap refers to the difference between tax receipts owed to the federal government and what it actually collects.  The projected lost revenue from the tax gap in 2006 was nearly $385 billion.  There have been many proposals to close the tax gap by changing the reporting and paperwork requirements, as well as increasing audits.  All of these proposals have a harsh impact on small businesses and NFIB is leading efforts to protect small business owners from additional and complex tax requirements.
 
Instead of making tax filing more complicated, the best way to close the tax gap is by simplifying the tax code.  Reducing the tax filing burden and clarifying complicated rules will mean fewer unintentional errors and less opportunity to cheat the system.  NFIB will work with Congress and the Administration to pass proposals that will simplify the tax code and reduce your filing burden.

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