Main Street Fairness Act

Mr. President, I wish to speak in support of the Main Street Fairness Act, which will help to create tax parity for passthrough companies, the significant majority of which are small businesses. I was very pleased to be joined by my friend and colleague from Florida, Senator Nelson, in introducing this bipartisan bill.

Small businesses are our Nation's job creators. According to the Small Business Administration, small businesses employ more than half of all workers and have generated two-out-of-three net new jobs since the 1970s.

Small businesses also make an outsized contribution to our Nation's economy, generating half of our Nation's GDP, 54 percent of all U.S. sales, 41 percent of private sector payroll, and one-third of our Nation's export value. Their success is critical to the health of our economy.

Unfortunately, our Nation's small businesses face a higher tax burden that affects their ability to compete with large firms in the marketplace. In fact, a recent survey by the National Federation of Independent Business, NFIB, found that concerns about Federal taxes on business income ranked third on the list of the top 10 problems facing small businesses.

Nearly all of our Nation's small businesses are organized as passthroughs, meaning that their profits are passed on to their owners and reported on individual income tax returns. This means that small business income is subject to taxation at individual rates, which can be as high as 39.6 percent at the Federal level and can exceed 50 percent in some States. If we want our small businesses to grow and create jobs, we must reduce these high marginal rates.

I believe Congress should undertake comprehensive tax reform to make our Tax Code simpler, fairer, and more progrowth. As we do so, we must make sure American businesses of every size are given the opportunity to compete. Aligning the tax rate for passthroughs with our corporate tax rate will ensure small businesses are not left behind. That is why Senator Nelson and I introduced the Main Street Fairness Act, which will link the tax rates of passthrough entities and large corporations, to ensure that small businesses never pay a higher tax rate than large companies.

This simple change will help make sure that small businesses remain healthy and strong, so they can continue to serve as our Nation's job creators, as they have for so many years. I would note that the Main Street Fairness Act has been endorsed by the NFIB, the leading voice for America's small businesses, and I urge my colleagues to join us in supporting it.

I ask unanimous consent to have a letter of endorsement from the NFIB printed in the Record.

Mr. President, today I want to join my friend Susan Collins and talk about why I support the Main Street Fairness Act. I am glad to partner on this bill with the Senator from Maine.

The bill does one simple thing: It ensures small businesses don't have to pay higher taxes than the largest corporations. This is the type of common sense that we need more of in Washington.

There are 2.3 million small businesses in Florida, employing around 43.2 percent of the State's workforce. They are the primary engine of job growth in the country, and are a proven means for economic mobility.

Under most circumstances, small businesses are subject to the same rules as large corporations but are treated differently under the Tax Code. They already have a hard enough time competing with large multinational corporations, which can hire an endless stream of high- priced tax lawyers to shift their income abroad and avoid U.S. taxes.

We should be doing all we can to put small businesses on a more level playing field. Part of that starts with this bill, but it doesn't end here. We need to do comprehensive tax reform.

This bill should be part of that conversation, as one way we could help small businesses. It is not the only way, and I am certainly open to other ideas, but we need to have a serious talk about how we are going to freshen up the Tax Code and help the economy grow.

I know a lot of my colleagues have different ideas about what tax reform should look like, but I think we should all be able to agree that it needs to be real reform, not just a temporary tax cut. It needs to support a technology-driven economy and help us transition to a greener, fairer economy--with a lot less disparity.

Tax reform should also generate enough added revenue to pay for the infrastructure we desperately need. That includes the crumbling roads and bridges that threaten the safety of millions of Americans and are a tax on small businesses. We also need to invest in our water infrastructure, energy infrastructure, ports, railways, public schools, and affordable housing infrastructure.

At the same time, tax reform needs to be deficit neutral. You might ask, how are we going to pay for all this? Well, we can start by getting rid of outdated special interest tax breaks that are no longer needed or don't make sense in the 21st century.

We can also eliminate tax loopholes that allow companies to shift profits abroad and lead to corporate inversions.

This bill, the Main Street Fairness Act, is a good start, but it shouldn't end here. We need to have a serious, deliberative effort to develop a bipartisan tax reform package.