By That America’s small business owners are craving tax cuts that would allow them to keep more of their own money is not surprising. What is surprising is the fact that so many are optimistic about the future despite the current administration’s inability to convince Congress to adopt a revolutionary tax plan. According to a recent CNBC poll, more than a few small business owners think the future looks good.
According to the survey of more than 2,000 small business owners across the country, 42% believe proposed tax law changes will benefit their businesses in the future. Some 33% think such changes will have no effect while 24% are expecting a negative impact. In addition, the number one concern of small business owners are the taxes that they believe are preventing them from growing and expanding.
So, will small businesses get the tax breaks they crave? No one knows for sure. Furthermore, all we know right now about the administration’s tax plan is how it approaches income and corporate taxes. But there is more to it than that according to BenefitMall, a small business online payroll provider based in Dallas.
More Than Just Income Tax
BenefitMall explains that American businesses are subject to more than just income and corporate taxes. HR and payroll departments across the country have to deal with regular tax withholding for federal and state payroll taxes, including FICA. And it is not just employee contributions. Employers must also contribute their share as well.
The administration’s bold tax proposals would certainly help reduce income and corporate taxes. They are not likely to do much for payroll taxes. Bringing payroll taxes down would require a revamping of Social Security and Medicare – and that’s just for starters. Congress cannot even think about doing that until they get the income tax question settled.
Why Taxes Are Such a Problem
Small business owners crave tax cuts because money tied up in taxes means less money they have to invest in their companies. As the CNBC survey shows, business owners would love to do things like invest in employee training and education. They cannot because there’s not enough money left over after paying the bills and satisfying their tax obligations.
Taxes are an even bigger problem for owners of small, privately owned businesses. Why? Because they pay both portions of federal and state taxes. For example, a sole proprietor running a small family business as a remodeling contractor pays his own income and FICA taxes just like any other American worker. But he also pays the employer’s share as well, effectively taxing him twice even though he is not technically an employer. More than 15% comes right off the top of the sole proprietor’s revenue just to pay the federal payroll taxes. State taxes can take more.
The idea of lowering taxes for business may seem foreign to employees who do not really know how much their employers pay. But for small business owners, the amount of money transferred from their bank accounts to federal and state coffers is very real and very burdensome.
That America’s small business owners are craving tax cuts that would allow them to keep more of their own money is not surprising. What is surprising is the fact that so many are optimistic about the future despite the current administration’s inability to convince Congress to adopt a revolutionary tax plan. According to a recent CNBC poll, more than a few small business owners think the future looks good.
According to the survey of more than 2,000 small business owners across the country, 42% believe proposed tax law changes will benefit their businesses in the future. Some 33% think such changes will have no effect while 24% are expecting a negative impact. In addition, the number one concern of small business owners are the taxes that they believe are preventing them from growing and expanding.
So, will small businesses get the tax breaks they crave? No one knows for sure. Furthermore, all we know right now about the administration’s tax plan is how it approaches income and corporate taxes. But there is more to it than that according to BenefitMall, a small business online payroll provider based in Dallas.
More Than Just Income Tax
BenefitMall explains that American businesses are subject to more than just income and corporate taxes. HR and payroll departments across the country have to deal with regular tax withholding for federal and state payroll taxes, including FICA. And it is not just employee contributions. Employers must also contribute their share as well.
The administration’s bold tax proposals would certainly help reduce income and corporate taxes. They are not likely to do much for payroll taxes. Bringing payroll taxes down would require a revamping of Social Security and Medicare – and that’s just for starters. Congress cannot even think about doing that until they get the income tax question settled.
Why Taxes Are Such a Problem
Small business owners crave tax cuts because money tied up in taxes means less money they have to invest in their companies. As the CNBC survey shows, business owners would love to do things like invest in employee training and education. They cannot because there’s not enough money left over after paying the bills and satisfying their tax obligations.
Taxes are an even bigger problem for owners of small, privately owned businesses. Why? Because they pay both portions of federal and state taxes. For example, a sole proprietor running a small family business as a remodeling contractor pays his own income and FICA taxes just like any other American worker. But he also pays the employer’s share as well, effectively taxing him twice even though he is not technically an employer. More than 15% comes right off the top of the sole proprietor’s revenue just to pay the federal payroll taxes. State taxes can take more.
The idea of lowering taxes for business may seem foreign to employees who do not really know how much their employers pay. But for small business owners, the amount of money transferred from their bank accounts to federal and state coffers is very real and very burdensome.
No one really knows where the administration’s tax plan is headed. If Congress manages to push it through in a form similar to what we already know, it could mean very good things for small businesses. Their optimism would be rewarded with lower taxes that would let them keep more of their money. But for right now, small business owners can only hope. Their payroll departments will keep making those payroll tax payments while they keep putting off further investments in their companies.
No one really knows where the administration’s tax plan is headed. If Congress manages to push it through in a form similar to what we already know, it could mean very good things for small businesses. Their optimism would be rewarded with lower taxes that would let them keep more of their money. But for right now, small business owners can only hope. Their payroll departments will keep making those payroll tax payments while they keep putting off further investments in their companies.
