America’s Small Firms Say They Need A Simpler Tax System
America’s small businesses want the Bush administration to focus on simplifying
the tax code when carrying out its promised tax reforms, in order to allow firms to spend
more time concentrating on growth and less time filling out forms.
Speaking at the two-day economic conference called by President Bush to spark
ideas on how to carry out an ambitious program of reform encompassing the social
security, health and legal systems as well as taxation, certified public accountant
June Lennon stated that the tax code has reached a “complexity crisis.” "Each tax law brings more complexity, even when it gives us tax breaks
and incentives," she observed. A prime example of this, according to Lennon, was the bonus depreciation measure
passed by Congress in 2002 which provided an up front 50% depreciation allowance
on the purchase of equipment and machinery. Whilst the measure was generally welcomed by business, she noted that the added
paperwork necessary to claim the tax break took the gloss off its benefits,
especially as different states keep different depreciation schedules. To help simplify the tax system for small firms, Lennon recommended that the
administration seek to make permanent ‘Section 179’ expensing, which
allows businesses to write off up to $100,000 in expenses for new investments,
whilst also locking in lower rates for ‘S’ Corporations, reforming
the Alternative Minimum Tax and repealing estate tax.
A comprehensive report in our Intelligence Report series looking at offshore and onshore corporate structures and their tax implications is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report7.asp
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