Monday, July 16, 2012

Give Small Business Owners a Break on FICA Taxes

Republicans are always saying that we do not give tax breaks to small businesses so that they can grow their businesses. Here is a prime example of how small business leaders have to pay more in taxes than people who work for someone else.

Anyone who has ever worked for themselves knows that when you run your own company you are double taxed through FICA. While employees pay 4.2% at present, employers pay 6.2% for all income earned under $110,000. Social Security charges small business owners twice for their taxes. (Once for the employee’s portion--Once for the employer’s portion of the tax.) How does that encourage or reward the job creators of this country? Since legislators are already looking at the law that lowered employees contributions to 4.2% from 6.2%, now would be the time to make a change that could help small business owners.

The answer to this problem is to raise or remove the cap on FICA for people earning more than $250,000 and have small business owners only pay once for their FICA tax. This would put more money into the hands of small business leaders without harming middle or low-income earners. It would also be a pay as you go type of change in the laws.

Republicans say they favor lowering taxes on small business owners so here is an opportunity for them to put their money where their mouth is!