Small businesses are described by politicians as self-made entrepreneurs who built their companies “on their own,” and therefore oppose “job-killing taxation.”
But a nationwide scientific opinion poll conducted in October found that the majority of small business owners—more of whom identify as Republican (47 percent) than Democrat (35 percent) — see a productive role for government in helping small businesses achieve success. The polling also found the majority believe that raising taxes on the wealthiest 2 percent is the right thing to do.
Nearly 6 in 10 small business owners see a productive role for government in helping business thrive.
A majority (53 percent) of small businesses owners believe the most important job for Congress and the President next year is crafting a plan to create jobs. Only a minority (43 percent) feel reducing the deficit is most important.
In Texas, there is widespread awareness that the Legislature is responsible for making the investments in public and higher education, transportation, and water needed for small businesses to prosper in the future. The issue, of course, is how to fund these necessary expenditures. CPPP supports raising revenue by eliminating outdated and wasteful tax exemptions by subjecting the Tax Code to a periodic sunset review, modernizing the sales tax by expanding taxation of the fast-growing service sector, and consideration of Healthy Texas taxes, such as a tax on sugary drinks.
A majority of small businesses polled (52 percent) agree that, given the federal budget situation, we should raise taxes on the wealthiest 2 percent, and 4 in 10 strongly agree. Only a minority (39 percent) believes raising taxes on the wealthy means raising taxes on job creators and small businesses.
Although more than half of small business owners have their business income passed through to their personal taxes, only 5 percent have total household income exceeding the $250,000 level at which federal income tax rates would be increased.
Since Texas lacks a state personal income tax, the Legislature does not have a mechanism for focusing directly on higher-income individuals. But, since our state/local tax system is among the most regressive in the nation — taking a much higher proportion of family income from low- and moderate-income families — the Legislature could act to rebalance our system to spread the responsibility for supporting pubic services more fairly. This could be accomplished by eliminating special-interest tax breaks, such as the “high-cost natural gas” exemption and school property tax abatements granted under Chapter 313 of the Tax Code.