Posted by Kristin Oberlander - The self-employed want Congress to take pains to protect the middle class from tax increases, according to a new study published by the NASE. When asked about preference in proposals to address expiring tax rates, 46% of micro-businesses chose a one-year extension of current tax rates for those making under $250,000. Thirty-four percent indicated that they would like to see the extension applied to all income brackets. Nearly 100 percent of business owners said it is very or moderately important for Congress to address these reforms.
"The findings of our tax survey re-emphasize the growing impatience of the self-employed as Congress continues to fail to address comprehensive tax reform," said Director of Government Affairs Katie Vlietstra. "Seventy-eight percent of respondents support efforts to reform both the individual and corporate tax structure; in fact, 61 percent of respondents are open to exploring proposals that drop the individual rate and eliminate deductions."
One in four business owners said that Congress’ inability in recent years to enact long-term tax policy impacts business owners' ability to plan for the coming year. One in three said that this behavior continues to highlight the federal government’s inability to address issues in a timely fashion.
Sixty-one percent would be amenable to giving up a significant number of deductions, if the individual tax rate were dropped to an acceptable level. These are the top five deductions currently taken: charitable contributions, health insurance deduction, mortgage interest deduction, qualified medical and dental expenses, home office deduction and retirement contributions (tie).When asked what top three deductions should be kept in the scenario, respondents chose the health insurance deduction, mortgage interest deduction and contributions to retirement accounts.
Business owners were divided on increasing the corporate tax rate in an effort to reduce the individual tax rate: thirty-eight percent said it would depend on the level of increase and decrease. Thirty-five percent were against the proposal and twenty-six percent were for it.
"It is our hope that the survey provides the final push for Congress to work to address these issues and focus on a long-term comprehensive approach to tax reform in 2013," said Vlietstra. "The self-employed demand an equitable tax environment.
See the full survey in the NASE Survey Results section here.