The Future of Tax Policy: Implications for Small Business and Entrepreneurs

With tax day fast approaching, there is a considerable lack of clarity about what the tax code will look like this time next year. Small businesses and entrepreneurs are especially sensitive to current and expected tax policy given that they must make important, long-term decisions today on investment, hiring, and expansion.  Accordingly, the highly uncertain outlook for U.S. tax policy has high stakes for their growth and survival.  This paper examines the elements of three possible scenarios:

• The "autopilot" scenario failure of White House leadership that defaults to large tax increases at the end of 2012;
• Enactment of the president’s policies that include higher taxes and large deficits; and
• The House-passed budget containing tax and entitlement reforms. 

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