FOR IMMEDIATE RELEASE
Contact:
Jenna Weisbord, 202-662-0766
jweisbord@franchise.org
@franchising411
IFA Pushes for Tax Reform that Supports America’s Small Businesses
WASHINGTON, July 18—International Franchise Association, the world’s largest organization representing franchise owners, submitted recommendations for tax reform to Senate Finance Committee Chairman Orrin Hatch encouraging lawmakers to pursue tax reform as a way to support the franchise industry and improve the American tax system as a whole.
“We appreciate the opportunity to submit recommendations for tax reform to the committee. Our overarching goal for tax reform is to modernize the current code with a system that is simpler, flatter, and fairer for all Americans, especially small businesses. Simplifying our outdated tax code is crucial to franchise businesses and a necessary catalyst for more robust business investment, a stronger economy, and a growing job market,” said IFA’s Chief Legal Officer Elizabeth Taylor. “Nearly five out of six businesses file their tax returns as either S Corps or pass-through entities and are therefore subject to individual tax rates. As a result, most small businesses are taxed at the highest marginal rates. The franchise industry strongly believes that tax reform must include both small and large businesses to foster robust economic growth for the country as a whole.”
As stated in the letter, of IFA members, 58 percent of franchisees and 39 percent of franchisors file as pass-through entities. Nearly 80 percent of franchise owners file their business income on their individual tax returns because they are not organized as large corporations. The number of individuals filing as S Corps and pass-through entities has increased over the last fifteen years while C Corp filings have fallen, reinforcing the need for tax reform that includes both small and large businesses. If tax reform only addresses corporate tax rates, small businesses – many of them franchised – would be at a severe disadvantage.
IFA also supports the elimination of the “Death Tax” as well as the net investment income tax since they are particularly burdensome to small business owners such as franchisees. “In our discussions with franchisors, reducing the repatriation tax rate is very important. This would allow our multinational franchisors to send their foreign earnings back to the U.S., and then use the earnings to create more American jobs and expand operations in the U.S,” the letter stated.
“Overwhelmingly, IFA members have ranked lowering tax rates for small businesses as the highest priority change Congress could make to the tax code, and we are committed to working with Congress to achieve that goal,” stated Taylor.
To view the letter, please click here.
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About the International Franchise Association
Celebrating 56 years of excellence, education and advocacy, the International Franchise Association is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising and the more than 733,000 franchise establishments that support nearly 7.6 million direct jobs, $674.3 billion of economic output for the U.S. economy and 2.5 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law, technology and business development.