COMMENTARY The business community is dead-set against raising taxes on the rich, right? Sorry, trick question. It's fallacious to think that there is single, monolithic bloc of company owners and managers out there all singing from the same economic hymnal.
Many small businesses, in contrast to U.S. multinationals, largely back the , a plan made famous (or infamous) by legendary investor Warren Buffet that would hike tax rates on top income-earners, according to a new survey.
Some additional findings from the poll, which was commissioned by a trio of trade groups representing small businesses:
-- Small business owners overwhelmingly believe big corporations use loopholes to avoid taxes that small businesses have to pay: A sweeping 90 percent believe this to be true; 92 percent say big corporations' use of such loopholes is a problem.
-- Nine out of 10 small business owners say U.S. multinational corporations using accounting loopholes to shift their U.S. profits to offshore subsidiaries to avoid taxes is a problem: 91 percent of respondents agreed it is a problem, with 55 percent saying it is a very serious problem.
-- A majority of small business owners say their business is harmed when big corporations use loopholes to avoid taxes: Three-quarters of respondents agree that their small business is harmed when loopholes allow big corporations to avoid taxes. More than one-third say it harms their business a lot.
-- Small business owners say big corporations are not paying their fair share of taxes: 67 percent believe big corporations pay less than their fair share of taxes. An even bigger majority, 73%, says multinational corporations pay less than their fair share.
-- Small business owners say households making more than $1 million a year pay less than their fair share in taxes: 58 percent of owners say households whose annual income exceeds $1 million pay less than their fair share.
-- Small business owners support a higher tax rate for individuals earning more than $1 million a year: 57 percent of respondents agree that individuals earning more than $1 million a year should pay a higher tax rate on the income over $1 million. Only one small business owner out of 500 polled reported their annual household income to be more than $1 million.
-- Four out of five small business owners disapprove of the "carried interest" loophole that gives hedge fund managers a big break on their taxes: 81 percent of small business owners favor hedge-fund managers paying taxes at the ordinary income tax rate, with a top bracket rate currently set at 35 percent, rather than the 15 percent capital gains rate. Some 61 percent strongly support this change.
-- A majority of small business owners believe Congress should let tax cuts expire on taxable household income exceeding $250,000 a year: 51 percent of respondents believe Congress should let tax cuts on taxable household income exceeding $250,000 a year expire (40 percent said they should be extended).
The survey of 500 small businesses highlights a key point that tends to get lost in discussions of tax reform: Small companies and big companies in the U.S. have divergent interests. For instance, large corporations are pushing for a tax "holiday" under which they could repatriate their overseas profits at a dramatically reduced tax rate. Clearly, that would do little for small businesses, which live or die according to local economic conditions.
That's not to disparage big companies. Among other contributions, they account for most of the private sector research and development in this country, along with a disproportionately large share of exports. But it is to recognize that what is good for one business community in the U.S. isn't necessarily good for another.