Ways and Means Subcommittee on Select Revenue Measures Ranking Member Richard E. Neal (D-MA) delivered the following statement today at a Subcommittee hearing on small businesses and tax reform:
“Mr. Chairman, thank you for calling this hearing today, which I hope will be the first of many on the topic of tax reform. Earlier, I commented on how this Subcommittee always hears diverse points of views and today is no exception.
“We have one witness complaining that there are too many special provisions for small businesses that the clutter is overwhelming. We have another saying these special provisions make for a code that favors small business over large. And another tells us we need to lower income taxes on the upper-income to save small businesses.
“One thing we can agree on is that the U.S. offers some of the most flexible rules on structuring your business in the developed world -- offering limited liability without the requirement of the corporate level tax. As one witness will tell us today, we are second only to Mexico in the size of unincorporated businesses as a total share of business and that this self-help integration is a step towards reform.
“While this hearing is intended to explore special tax issues of pass-through entities, much of the discussion will involve small business incentives. We should note that the two are not necessarily the same. As one witness tells us, less than 1% of all pass-throughs are large businesses with more than $10 million in receipts but they accounted for almost 60% of the total revenues of all pass-throughs.
“It was Confucius who said, ‘A journey of a thousand miles begins with a single step.’ I commend you on taking this first step on the road to tax reform, but surely hope our journey does not take a thousand hearings. Thank you, Mr. Chairman.”
