Refined Tax Code Will Stimulate Entrepreneurship [Commentary]

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Refined Tax Code Will Stimulate Entrepreneurship [Commentary]

Nov 03, 2011

Posted by Kristie Arslan - Let's face it: corporations are treated very differently than self-employed businesses in the U.S., especially when it comes to taxes. A corporation is able to write off the amount it pays for its employees' health insurance, lowering its taxable income. Self-employed business owners, on the other hand, are the only type of business that must pay for health insurance with post-tax dollars. This makes health insurance too expensive for many of the self-employed -- money that can be better spent on advertising, phone lines or even hiring additional workers.

Making health insurance more expensive is just one way in which the tax code is unfair to small-business owners. One of the pillars of the self-employment initiative that we have been advocating for calls upon lawmakers to simplify the tax code by creating tax parity for self-employed businesses. Small-business owners must be their own Human Resources, Sales and Accounting Departments, among other roles. They do not have the same resources as big businesses that can hire teams of people to manage their affairs and keep them compliant with current law.

A few small changes to the tax code would make a big impact on the nation's smallest businesses. Many more people may go into business for themselves -- keeping them off of the unemployment rolls -- if it was easier to do so. There's much to think about in terms of tax implications when starting a business and entrepreneurs won't necessarily have a CPA or tax lawyer at their disposal to navigate through the many different considerations. However, there are other resources available for those who need help navigating the complicated tax code. A refined tax code will help get the nation's unemployed back to work and our economy on the right track.

This article is also cross-posted on Huffington Post.

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