American University Annual Report 2016-2017

TAX SCHOLAR FINDS BILLION DOLLAR BLIND SPOT
As Congress prepares for the biggest rewrite of the nation’s tax code
in more than three decades, Caroline Bruckner, managing director
of the Kogod Tax Policy Center, is calling on policy makers to fill a
gaping hole in the national discussion of how tax policy helps—or
harms—women business owners.
The center has issued Bruckner’s Billion Dollar Blind Spot: How the
U.S. Tax Code’s Small Business Expenditures Impact Women Business
Owners. The report estimates American taxpayers will shoulder the
cost of more than $255 billion in small business tax incentives by 2020.
Among the groundbreaking report’s most staggering findings:
exhaustive research of Senate hearing transcripts, going back to
the 1980s, found no record of discussions of the tax code’s impact
on women-owned businesses.
“Policymakers have a billion dollar blind spot when it comes to
understanding how effective small business tax expenditures are
with respect to women-owned firms,” said Bruckner. “Changing
policies that affect this specific group of small business taxpayers
could be a key to unlocking growth for parts of the economy that
we’ve never considered.”
The report indicates that while women entrepreneurs have been
launching startups at a faster rate of growth than men for the past
decade, the tax code gives them less access to capital than their male
counterparts. The reason: most women-owned startups are in service
industries, a sector considered less scalable despite America’s ongoing
tectonic shift from manufacturing to services.
Billion Dollar Blind Spot incorporates survey data conducted
by Women Impacting Public Policy (WIPP), a national nonpartisan
organization advocating for women entrepreneurs.
In 1986, the last time Congress wrote a major overhaul of the tax
code, the number of women business owners stood at 4.1 million.
That number has grown to more than 10 million, said WIPP president
Jane Campbell.
“It is high time for key stakeholders, Congress, and the US Senate
Committee on Small Business and Entrepreneurship (SBC) to undertake
the nation’s first full look at the tax code’s impact on women-owned
businesses,” said Bruckner, who served as chief counsel at SBC.
“Congress must be informed when making these decisions, or women
business owners could continue to lose out,” she said.
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