New NFIB Study Finds Small Businesses Remain Significantly Burdened By Federal Taxes
A new tax survey of small business owners assessing their biggest tax challenges, implications of potential changes to the tax code, and how tax policy impacts business operations, has been released by the NFIB Research Center. Not surprisingly, federal income and payroll taxes are significant costs and administrative burdens for small businesses.
“High tax rates have been a long-standing concern and significant burden for small business owners,” said Holly Wade, executive director of NFIB’s Research Center. “The majority of owners report high business taxes impose both a significant financial and administrative burden to their businesses.”
Some of the key findings of the study:
- Ninety percent of owners reported federal business income tax was a financial burden for their business. Payroll and state/local income taxes were also highly reported burdens.
- More than half of owners (52%) plan to sell their business when it’s time to move on and nearly one-third plan to pass their business to a family member (33%).
- If capital gains tax were assessed at the time of business inheritance, owners were most likely (38%) to believe family members inheriting the business would take out a loan to pay the tax, another 26% anticipate that family members would sell part of the business.
- Around four-in-five owners (78%) report that the majority of their total household income comes from their primary business.
- Nearly half (48%) of owners indicated that the pending expiration of the Tax Cuts and Jobs Act (TCJA) was a source of uncertainty for future business plans.
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