Big ‘I’ Calls for Market Parity in Tax Reform

The Big “I” continues to remind Congress that any effort to enact tax reform should address individual rates for small business pass-through entities, along with corporate rates.

Comprehensive tax reform will make all businesses more competitive. As a member of the Parity for Main Street Employers, the Big “I” was the only agent and broker group to sign a letter to leadership of the U.S. Senate Finance Committee and House Ways and Means Committee, addressing tax reform efforts for S Corporations (S-Corps), partnerships and sole proprietorships.

The majority of Big “I” members file at individual rates since they are organized as pass-through entities. The association is advocating that any tax code overhaul should provide simplification and certainty for individuals and small businesses, along with their C Corporation (C-Corps) counterparts. To avoid harming main street businesses and taxing business income at different rates, reforms must address both C- and S-Corps.

The letter also asks Congress to restore rate parity by reducing the tax rates that pass-through entities and corporations pay. The 2012 fiscal cliff negotiations resulted in pass-through entities paying a significantly higher top marginal tax rate than corporations. Reducing the top tax rates to similar levels for all tax payers will lead to simplification of the tax code and fairer rates for all businesses.

Jen McPhillips is Big “I” assistant vice president of federal government affairs.