Uncertainty seems to be an unfortunate constant among the small business community today, and one of the major issues business owners want more clarity on is tax policy.
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According to a recent survey from Alvarez & Marsal Taxand, “CFO Matters: Tax Perspectives Survey Highlights,” both large and small-business CFOs rank certainty in the tax code as more important than a reduction in corporate tax rates. When given the opportunity to eliminate or significantly alter one aspect of the tax code, most of the 300 CFOs surveyed said they would increase certainty in the code overall (37%).
Taxes may also have a direct impact on how these business-runners vote in November’s elections, the survey said, considering their views on the policies and potential reforms coming out of Washington.
Small-business owners in particular (28%) said that a lower corporate tax rate of between 15% and 20% would be necessary to make the U.S. competitive with foreign income tax rates. The survey respondents named Texas, Florida and Nevada among the most competitive states to operate in thanks to their tax policies, whereas California, New York and New Jersey were ranked least competitive.
Small companies in the survey also named tax audits as the greatest risk posed to their business, with 29% of respondents choosing that option, followed by 23% naming global compliance as their greatest risk. Fifteen percent of small businesses said they model the impact of tax proposals due to the actions Congress and the Obama Administration have taken to reform the tax code, 22% said that such reform is unlikely, but is dependent on the 2012 election results.