WASHINGTON – A new coalition wants Congress to lower effective tax rates for both small and large businesses — a strategy that aims to combine the political clout of two groups that can at times be at odds .
The group, called the Coalition for Fair Effective Tax Rates, is led by Dan Danner, the president of the National Federation of Independent Business, which represents thousands of small businesses, and Bill Hughes, senior vice president of the Retail Industry Leaders Association, whose members include companies like Target Corp. TGT -0.12%and Home Depot Inc. HD -0.16%Its formula relies on focusing on the tax rate that companies end up paying after credits and deductions are factored in.
Big and small businesses sometimes differ over tax policy because the groups are frequently subject to two different tax policies. Most small businesses pay taxes through the tax forms of individual owners, and face a maximum rate of 39.6%, while many large businesses pay the corporate tax rate, which tops out at 35%. With various tax breaks layered in to the mix, companies end up paying tax rates that can being even more varied.