Washington, D.C. — U.S. Senators Susan Collins (R-ME) and Bill Nelson (D-FL) introduced the Main Street Fairness Act, legislation that will help provide tax parity for small businesses so that their tax rate is never higher than a large corporation’s.
The overwhelming majority of small businesses are organized as pass-throughs, meaning that their profits are passed on to their owners and reported on individual income tax returns. Under current law, this income is subject to taxation at individual rates, which can reach nearly 40 percent at the federal level and can be significantly higher than the corporate tax rate. The Main Street Fairness Act would prevent pass-through companies from being taxed at a higher rate than C corporations.
“Small businesses employ more than half of all workers and have generated approximately two-thirds of our country’s net new jobs since the 1970s,” said Senator Collins. “Unfortunately, our nation’s small businesses face a higher tax burden that affects their ability to compete with large firms in the marketplace. Our legislation will help keep small businesses strong by ensuring that they do not pay a higher tax rate than large companies.”
“Small businesses are the cornerstone of our local economies and this bill is just one way we can help them succeed," said Senator Nelson.
Small businesses generate 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.
The Main Street Fairness Act has been endorsed by the National Federation of Independent Businesses (NFIB) and the National Association of Manufacturers. Companion legislation was introduced in the House of Representatives by Representative Vern Buchanan (R-FL).