For some businesses, like Jeremy Wanamaker’s Waypoint Solutions Group, an IT services provider with locations in Charlotte and Albany, New York, it’s more than just high rates. It’s simply the complexity of complying with the federal tax code that’s challenging. Wanamaker strategizes with his CPA to maintain competitiveness.
“We want to be as aggressive as we can while staying within the boundaries of the law,” Wanamaker, CEO of the 30-person company, said. “The tax code is too complicated. I think that small businesses are not able to reinvest money easily. The way we are taxed on our profits makes it difficult to reinvest. If we have a profitable year, we pay taxes on all of our profits, whether we use that money to take home or put it back into the business.”
The Trump administration’s proposal for parity between large and small businesses would be a “very effective way” to encourage small businesses to hire and grow, he said.
“If the tax rate on pass-through income was reduced, I could then take that money and reinvest it back into the business. That means hiring more people, buying equipment and doing something that impacts the economy as a whole.”
While Michael Chambers of Melt in Your Mouth agrees, he’s unsure Congress will be able to take action to move on tax reform anytime soon.
“They’re pushing health care hard right now, and if they even manage to get that passed, I don’t see them having anything left to be able to get any sort of meaningful tax reform through.”