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Show Fairtreatment expected In his current tax reform proposal, President Carter has apparently ignored the nation's problems of inflation, lagging capital investment, and unemployment. unem-ployment. Under the administration's ad-ministration's tax program, more than 75 percent of the tax benefits would go to the 1,300 largest corporations, cor-porations, while the millions of small corporations in our country would receive less than five percent per-cent of the tax reductions. Yet, the small business sector plays a major role in our nation's economic health and it has provided the vast majority of recent employment gains in our economy. President Carter's controversial tax package will seriously jeopardize the ability of the small business sector to continue its strong record of growth and employment, em-ployment, but he has threatened to veto any amendment to his tax bill. According to the National Federation of Independent Business (NFIB), a non-profit, non-partisan organization representing over 535,000 small and independent businesses, there are three major areas in which small business will be hurt by President Carter's tax package: First, the graduation in the corporate tax rate is still heavily slanted in favor of the very largest firms in our country. The tax system simply takes too large a bite at the lower end, when a small firm is almost totally dependent upon retained earnings to generate growth. Second, the President's proposal is designed to help large, capital-intensive capital-intensive firms through capital recovery and does almost nothing to ease the problems of small, labor-intensive firms. Furthermore, Fur-thermore, recent increases in Socail Security, unemployment compensation insurance and other payroll taxes, together with the increase in the minimum wage, have a disproportionately heavy impact on small business. Third, small business owners need a capital gains tax rollover. It is ironic that the administration claims a reduction in capital gains taxes will only benefit the ultra-rich. ultra-rich. This provision would actually stimulate the whole economy. An exemption from capital gains taxation on the sale of a qualified small business interest, if the proceeds are re-invested in another small business within two years, would keep equity capital in the small business community and would encourage the creation of new firms. The result of these shortcomings in President Carter's tax proposal is that the firms which can least afford it, will end up paying a proportions tley larger share of their profits in taxes. We believe the President's tax proposal should be amended to provide fairer treatment for small companies. Tax reforms for small business will go a long way toward economic recovery and increased employment. |