Editor’s note: This commentary is by Caleb Magoon, a business owner and community leader from Hyde Park who serves on the state board of the Main Street Alliance.
Despite tax day being in the rear view, a wave of dread rushes over my body as I continue to wade through documents provided to me by my accountant. I’ve written one big fat check to Uncle Sam and there is more to come. In fact, I’ve never been hit harder by the bearded fellow dressed in red, white and blue. As a result, I can’t help but ask myself, “How fair is our tax code for small business owners?”
We all pretty much know the answer to this question: Our tax code is not fair. Most small Vermont business owners are paying a 20-30 percent tax rate while many U.S. corporations pay nothing.
A guy like me can’t help but feeling like he gets screwed coming and going. Online companies have many competitive advantages like minimal brick and mortar infrastructure and no obligation to collect state sales tax, effectively withholding money from our local coffers. Vermont’s small businesses lose more customers to online businesses every year. Adding insult to injury, these same online retailers pay little in corporate taxes and move jobs and profits overseas when it is convenient. When was the last time you talked to an American on a customer service phone call?
Small business owners, on the other hand, do our part and pay what’s due. We are the cornerstones of our communities. You just don’t see Amazon donating to your local school fundraiser.
We are the cornerstones of our communities. You just don’t see Amazon donating to your local school fundraiser.
Yet, even worse are the companies who exploit the many loopholes in the tax code, even while taking incentives from the federal government. Exxon Mobil is a prime example. They consistently report some of the highest profits in the US while also receiving oil and gas subsidies from the Feds and paying next to nothing in corporate taxes. Talk about a sweet deal.
Tax reform has long been on the agenda for both parties in Washington. The perennial question is about how those tax reforms might look. Tax Day this year offers an especially timely opportunity for small business owners like me to speak up about what we need most from Washington when it comes to tax reform. It’s simple — we need Congress to close offshore loopholes that enable multinational corporations to dodge their taxes.
We don’t know how President Donald Trump and the GOP in Washington will tackle Tax reform. But if their approaches to the budget and health care reform are any indication, big corporations will fare far better than the small guys like me.
Right now, the GOP is setting the stage for how I and other small business owners will reflect on this year. This is their chance to demonstrate they truly care about entrepreneurship and small business and hear the calls of small business owners. We need customers with money to spend, not more tax cuts that move dollars out of our communities and into the already heavily padded pockets of people like Donald Trump and his friends.
I’ve diligently paid the piper with a fat tax check because I believe in doing the right thing. But I still can’t shake the feeling that I’m working for the benefit of drug companies, oil companies and high profit multinationals that are not playing by the same set of rules. I know one thing for sure: In the wake of Tax Day with big tax discussion under way, I will be letting Washington know where small businesses owners like myself stand on tax reform.