[Congressional Record (Bound Edition), Volume 163 (2017), Part 4]
[Senate]
[Pages 5226-5227]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        MAIN STREET FAIRNESS ACT

  Ms. COLLINS. 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.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                            National Federation of


                                         Independent Business,

                                    Washington, DC, April 3, 2017.
     Hon. Susan Collins,
     U.S. Senate, Dirksen Senate Office Building, Washington, DC.
     Hon. Bill Nelson,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senators Collins and Nelson: On behalf of the National 
     Federation of Independent Business (NFIB), the nation's 
     leading small business advocacy organization, we write in 
     strong support of S. 707--The Main Street Fairness Act. This 
     legislation would reduce taxes on pass-through businesses and 
     make them more competitive, and ensure that all businesses, 
     large and small alike, compete on a level playing field going 
     forward.
       The vast majority of small businesses are organized as 
     pass-through entities, which pay tax on business income at 
     the individual tax rates, which are currently as high as 39.6 
     percent, and not at the corporate tax rate, which is 
     currently as high as 35 percent. Such entities include any 
     company organized as a sole proprietorship, partnership, LLC, 
     or S-Corporation. The Main Street Fairness Act would ensure 
     that those pass-through businesses never pay a higher tax 
     rate than businesses organized as C-Corporations, and 
     immediately reduce the tax rate on pass-through businesses 
     currently paying more than 35 percent.
       Small businesses are the major source of growth and job 
     creation in our economy. In fact, according to the Small 
     Business Administration (SBA), small businesses account for 
     64 percent of the net new private sector jobs created in 
     America and make up 99.7 percent of U.S. employer firms. The 
     high tax burden currently facing small businesses holds back 
     investments, growth, hiring, and entrepreneurship. One in 
     five small businesses struggles with cash-flow, which is 
     needed to not only run their businesses but also support 
     their families. Specifically, after-tax income is an 
     especially important source of capital for small businesses. 
     High tax rates mean less money that small business owners 
     have to reinvest back into their business.
       Because of this, small businesses strongly support tax 
     reform that simplifies the tax code, lowers tax rates on 
     businesses, and promotes economic growth. The Main Street 
     Fairness Act will help ensure that all businesses, regardless 
     of how they organize, enjoy the benefits of any reduction in 
     tax rates that would be included in tax reform. We appreciate 
     your continued leadership on this key issue and look forward 
     to working with you as Congress considers tax reform.
           Sincerely,
                                                Juanita D. Duggan,
                                                  President & CEO.

  Mr. NELSON. 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

[[Page 5227]]

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.

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