President of the American Institute of Architects, George H. Miller, has voiced his concerns over Congress’ efforts to raise taxes on S corporations. Miller states, “In this economic climate, Congress’ effort to raise taxes on small businesses that form S corporations is clearly misguided. Such corporations create jobs and economic growth by reinvesting hard-earned capital.”
Indeed, the proposed heightened tax will hurt honest S-corporations. Small businesses, who are already paying their taxes, will have to lay off workers just to pay this higher tax. This move will inevitably slow down progress and increase unemployment – neither a good move for our economy these days.
However, some businesses wrongly categorize themselves as S-corporations to benefit from the lower tax rates. These firms should identified and their actions reprimanded. Yet, this new tax does not distinguish between honest and dishonest firms, “punishing thousands of honest small businesses that follow the rules,” explained Miller.