The overly complicated and uncertain tax code is undermining economic growth, Associated Equipment Distributors' (AED) Vice Chairman Tim Watters told the House Small Business Committee earlier today.
Watters, president of Hoffman Equipment in Piscataway, N.J., cited a recent AED tax survey outlining the construction equipment distribution industry's tax reform priorities and urged lawmakers to simplify federal tax laws to spur economic growth and job creation.
"The Internal Revenue Code is a complex web and we've become tangled in it," Watters said. He cited the example of the Affordable Care Act's new 3.8 percent tax on unearned investment income, which was created to ensure individuals who derive their earnings from passive sources, like stocks and beach houses, can't avoid paying Medicare taxes. "Unfortunately, because the passive income rules are so arcane, even the tax experts on the Hill who drafted the law didn't understand that brick and mortar companies that rent equipment would also be subject to the tax," Watters told lawmakers. AED is now working to resolve the problem for its members.
"Restoring certainty should be a guiding priority for tax reform," Watters said. "Certainty means making good policies - like higher Section 179 small business expensing levels - permanent. It means ensuring consistency in the code from year to year so business owners know the things they're doing today will still be permissible a year - or a decade - from now. And it means putting the Highway Trust Fund back on solid fiscal footing by raising the gas tax or creating new user fees."
Watters' written statement
More info on the hearing at the House Small Business Committee website
