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Allowing Tax Incentives To Expire Will Hurt Small Firms
NASE Asks Legislators To Help the Recovery by Helping Small Business
Although originally enacted to prevent those Americans with the most
resources at their disposal from avoiding taxes, the Alternative
Minimum Tax (AMT) did not take into account the effects of inflation,
the growth of earnings and expenses. Congress has adjusted the
exemption amount over time to keep up with inflation, but that
adjustment is now scheduled to end, which would result in an increased
tax burden for many small business owners and families.
The NASE’s National Tax Advisor,
Keith Hall,
testified before the House Committee on Small Business today about how
allowing the AMT and other tax incentives to expire would cause a
direct and unintended tax increase on the small business sector that
many are relying on to continue the economic recovery. Hall suggested
that at a minimum, the exemption amounts should not be allowed to
decrease, but should be increased annually based on an inflation index
in order to continue the recovery.
“Allowing the increase in the exemption amount to ‘sunset’ would
directly increase the tax burden for many Americans past their ‘fair
share’ simply because they may live in a state with a higher than
average state income tax. Others would pay more than their fair share
simply because they have a larger than average family. Others would pay
more than their fair share simply because they have higher mortgage
interest due to a second lien necessary to fund their business or a
child’s education. Clearly, none of these scenarios was the intent of
the AMT from so many years ago,” noted Hall.
The NASE supports the extension of expiring tax incentives including
the AMT exemption, accelerated depreciation, sales tax deductions,
first time home owner buyer credit and others. The key point for
supporting the extension of tax incentives is to support extending the
economic recovery. The NASE believes in the long term impact that small
business will have on the overall economy. Promoting investment,
encouraging new job development and keeping the playing field level for
all taxpayers is essential to long term recovery.
Read the full text of Keith Hall's testimony
here.
Watch highlights from Keith Hall's testimony on
YouTube.
Track the progress of current legislation that would help micro-businesses and the self-employed by visiting
advocacy.NASE.org.