WASHINGTON, April 13, 2011 /PRNewswire-USNewswire/ -- Rep. Nydia M. Velazquez (D-NY), the Ranking Member of the House Committee on Small Business, delivered the following statement today at a hearing entitled "How Tax Complexity Hinders Small Businesses: The Impact on Job Creation and Economic Growth":
"Thank you, Mr. Chairman. With tax day fast approaching, filing taxes is on the minds of many Americans – particularly small business owners. This Committee is well aware of the challenges created by the Internal Revenue Code. Over the past decade, businesses have repeatedly expressed to Committee Members that tax complexity has become a major obstacle to job creation.
"While this issue has been recognized for some time, the problem seems to be getting worse, not better. Over the last ten years, there have been approximately 4,428 changes to the tax code – an average of one per day. These changes compound an already burdensome tax system, creating confusion and higher compliance costs. In fact, individuals and businesses spend about 6.1 billion hours a year complying with the filing requirements.
"These burdens can hurt small businesses as they seek to compete both domestically and abroad. Small firms now spend up to 67 percent more on tax compliance than their corporate competitors. And on the global front, the U.S. ranks an embarrassing 65th worldwide for time spent complying with business tax filings.
"This hearing will hopefully offer insight not only on the problem, but also on potential solutions. After all, as we look at policies to promote growth, tax reform should be a top priority. A fairer and simpler tax code can encourage entrepreneurship, promote investment and lead to job creation.
"One thing is clear as we talk about reform – the needs of small businesses must come first. We cannot move forward without their input and we must fully recognize the impact of how any changes would affect them. At a time when the economy is starting to exhibit sustained job creation, small firms cannot have new obstacles to expansion.
"Fundamental tax reform obviously poses its own challenges. Back in 2005, this Committee heard testimony from the Tax Reform Panel appointed by President Bush – but its recommendations went nowhere. The latest 2010 Deficit Commission similarly recommended a major overhaul to the tax code, but the report did not gather enough support to force a vote in Congress.
"Today's hearing will hopefully start the process of crafting solutions to our overly complex tax code. It is clear that small businesses and our economy can come out winners if reform is done right. Small businesses are the drivers of the nation's economy and we cannot afford to put the costs of collecting taxes on them. Entrepreneurs do not want preferential treatment, they just want equal treatment.
"I look forward to today's testimony and thank the witnesses for their participation. I yield back."
CONTACT: Alex Haurek
SOURCE Representative Nydia M. Velazquez, Ranking Member, House Committee on Small Business