For immediate release
Alisa Harrison, 202-628-8000
Matthew Haller, 202-662-0770
WASHINGTON, Aug. 1-The International Franchise Association today urged the U.S. House of Representatives to pass H.R. 8, the Job Protection and Recession Prevention Act, that would extend for one year current tax rates due to expire Dec. 31, 2012, and prevent a dramatic tax increase for many of IFA's members.
"Allowing current tax rates to expire would have dramatically negative ramifications on the ability of prospective and existing entrepreneurs, investors and small business owners to use the franchise business model to create jobs, own their own business and continue the growth of the franchising industry, which is responsible for one out of eight jobs," said IFA Senior Vice President of Government Relations & Public Policy Judith Thorman. "In franchising, multi-unit franchisees, many who file taxes as individuals, create the most new jobs and create them faster than other types of business owners. Raising taxes now will affect the bottom line and profits of the most successful franchise business owners, putting growth in the franchise sector at risk."
According to the IFA's midyear economic forecast, the franchise industry is projected to grow modestly in 2012 with the number of franchise establishments projected to increase 1.7 percent (12,454 more units to a total of 748,680) and the number of jobs projected to increase to 2.2 percent (177,000 new jobs to a total of 8,106,000 workers).
In addition to extending current tax rates for one-year, H.R. 8 calls for the House Ways and Means Committee Chairman to introduce a tax reform bill by April 30, 2013; with full House consideration in June 2013 and Senate consideration in July 2013. Tax reform parameters set forth in H.R. 8 include:
- A reduction of the corporate tax rate to at least 25 percent
- A repeal of the Alternative Minimum Tax
- Broadening the taxpayer base to maintain federal revenues at 18 to 19 percent of economic GDP
- Changing the corporate tax system to a territorial system
- Consolidating the current six individual tax brackets to no more than two brackets of 10 percent and up to 25 percent.
"Chairman Camp's approach to extend current rates for one year and begin a thoughtful, comprehensive tax reform discussion that addresses both corporate and individual tax rates will give franchise business added confidence to expand their businesses and hire workers in the short-term, and set us on a path toward long-term pro-growth this country urgently needs," said Thorman.
About the International Franchise Association
The International Franchise Association is the world's oldest and largest organization representing franchising worldwide. Celebrating over 50 years of excellence, education and advocacy, IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising. Through its media awareness campaign highlighting the theme, Franchising: Building Local Businesses, One Opportunity at a Time, IFA promotes the economic impact of the more than 825,000 franchise establishments, which support nearly 18 million jobs and $2.1 trillion of economic output for the U.S. economy. IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law and business development.