Opinion Poll: Tax Reform Should Focus on Bottom-Up Benefits, Small Businesses Say

Washington, D.C. — An opinion poll released today found that small business owners want lawmakers with the power to overhaul our nation’s tax code to focus on benefits that would help the smallest businesses rather than handing out the largest tax breaks to the wealthiest companies. 

The survey found that 82% of small business owners either strongly or somewhat agree that the tax system favors large corporations. Three-quarters also agree that wealthy individuals and large corporations don’t pay their fair share of taxes. Additionally, the poll found that even though a majority (64%) of small businesses take advantage of the 20% pass-through tax deduction under Section 199A, 53% support a proposed overhaul that would allow business owners to instead deduct the first $25,000 in net business income each year. This proposal would benefit small businesses with net income less than $125,000 per year—the majority of businesses in the United States. What’s more, small business owners also support reforms that would make large corporations pay more in taxes overall, including 52% that favor increasing the top corporate tax rate to 28%.

In 2025, Congress and the next administration will have a rare opportunity to enact meaningful changes to America’s tax system. Among the provisions of the landmark 2017 Tax Cuts and Jobs Act (TCJA) that are set to expire is the 20% standard deduction for pass-through income under Section 199A. Despite claims by lawmakers that the TCJA would help average Americans, nearly 70% of the current Section 199A pass-through tax deduction benefit flows to the wealthiest 4.5% of businesses. 

“The Tax Cuts and Jobs Act was a failed promise of prosperity for small businesses,” Small Business Majority Founder & CEO John Arensmeyer said. “Fortunately, we have an opportunity for a do-over. This time around, Congress must take into account the needs of the overwhelming majority of small businesses, many of which are struggling just to stay open and would greatly benefit from common-sense tax reform that delivers more bottom-up benefits. Failure to make important changes that would help support America’s smallest businesses will only further enshrine the inequities in our tax system.”  

In addition to tax reform, business owners also support more robust tax enforcement: Half of poll respondents agree that the IRS needs additional funding, and a large majority (82%) believe that additional funding is needed to properly audit large corporations.

"Our tax system clearly favors large corporations over small businesses,” said Elaine Read, owner of Xocolatl Small Batch Chocolate in Atlanta. “Even a modest rate cut for the biggest corporations can add up to billions of dollars in savings, whereas that same rate cut might only save small businesses with modest incomes a few hundred dollars. Companies that can afford to pay at a higher rate should, allowing for targeted tax breaks that offer significant benefits for the smallest and most vulnerable businesses." 

This poll reflects a survey of 588 small business owners nationwide. The poll was an online survey conducted July 9-15, 2024 via SurveyMonkey’s online panel. The margin of error is +/- 4%.

For the full poll report, please visit:  https://smallbusinessmajority.org/our-research/taxes-budget-economy/opinion-poll-small-businesses-support-bottom-tax-reforms