Be Aware of New Laws and Regulations
As small business owners, we need to be aware of new laws and legislation that may affect us. Small business owners are the major source of job creation in our economy. According to the Small Business Administration (SBA) 64 percent of businesses are considered small businesses and they make up 99.7 percent of firms with employees in the United States. With this in mind, our concern as small business owners is to support reforms that can lower taxes on our businesses and promote growth.
One particular act that promises to help small businesses is the "Main Street Fairness Act." This Act would protect small businesses and amend the IRS code to ensure that small businesses never pay a higher tax rate than companies that are organized as corporations. Why are small businesses paying a higher tax rate? According to the SBA, “Under current law, corporations pay a maximum tax rate of 35 percent, while small business owners pay up to 39.6 percent under the individual income tax code, on top of additional taxes on earnings and investments.” National Federation of Independent Businesses President and CEO Juanita Duggan states, "For small businesses, tax parity with big corporations is an important principle. The vast majority of small businesses are pass-through entities that pay taxes at the individual rate. Some of them actually end up paying at a higher rate than the big corporations they compete against.”
To keep track of these new laws it is important to research:
- Regulatory laws that affect how businesses operate;
- Labor laws that pertain to how businesses treat employees, including wages;
- Tax laws that control how business report their financial status; and
- Reporting laws that control how businesses report finances to investors and the government. Reporting laws concentrate mainly on preventing fraud.
Other important legislation that will affect small businesses is the Path Act, which allows business owners to deduct the cost of improvements made to commercial properties and allows them to save money by hiring specific groups such as veterans and people with disabilities. The ultimate goal of the legislation is to stimulate the economy. By learning about these laws, we too can be a catalyst in improving the economy and growing our own businesses.