Impact on American Businesses

Sensible Tax Reform

The Impact of Sensible Tax Reform upon American Businesses

The Impact of Sensible Tax Reform upon American Families

The Impact of Sensible Tax Reform upon Social Security and Medicare Taxes

The Fair-and-Simple Tax on Very High Incomes

The Impact of Sensible Tax Reform upon Estate Taxes

A Federal Consumption Tax

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The Impact of Sensible Tax Reform upon American Businesses

Businesses in this country pay very high taxes. The principal taxes paid are Social Security and Medicare taxes ($435 billion in 2007) and income taxes ($385 billion). [Note that our businesses pay more in payroll taxes (Social Security and Medicare) than in income taxes.] Under STR, both business payroll and income taxes will be eliminated. In addition, since businesses will no longer be subject to paying taxes, they will have very little tax compliance burden—or compliance costs. The reforms will effectively “untax” American business.

STR will open a new chapter in business efficiency and competitiveness. Managers now frequently complain of being hamstrung by excessive government tax regulation, compliance burdens and heavy taxes. Companies pay more than $800 billion in federal taxes plus an additional $165 billion in compliance costs—a trillion dollars in all. Those are all tax costs that businesses pass on to customers as higher prices, to workers as lower wages or to shareholders in poorer economic performance and lower dividends.

The burden of our current federal tax systems makes our businesses less competitive against their global competitors. It hurts both our exports and our ability to compete against cheap imports. [The United States is three times the size of China and four times the size of Germany, yet both countries export more than we do.] Although we benefit a great deal from global trade, we would benefit much more if our businesses were better able to compete.

The elimination of business tax costs will allow them to lower prices, increase investments, pay higher dividends, increase retained earnings and/or better reward their employees. All of these will greatly benefit businesses, their customers, their employees and the overall economy. U.S. exports will increase substantially. Imports will decline sharply. Our balance-of-trade deficit will fall. America’s need to borrow from foreign governments and investors will be greatly reduced. Hundreds of thousands of jobs will be created in this country. And, business profits will increase greatly.

One of the key goals of Sensible Tax Reform is to “un-tax” businesses in this country and to liberate them to compete more successfully against foreign companies.

• There will be an elimination of:


• All federal business income taxes,
• All business Social Security and Medicare taxes,
• The business alternative minimum tax (AMT),
• The need to collect income and Social Security taxes from their employees, and
• The obligation for complicated and expensive federal tax-compliance.


• There will also be a great simplification of business planning and financing.

Although retail businesses will collect the new federal consumption tax, businesses will not pay any federal consumption tax themselves.