The Trump administration is proposing parity for both small businesses and corporations in its blueprint to overhaul the tax code, bringing the rates from 35 percent for businesses to 15 percent.

The first-ever CNBC/SurveyMonkey Small Business Survey in June found taxes were the No. 1 issue for 25 percent of the more than 2,000 businesses surveyed.

In Charlotte, North Carolina, mother-son duo Julie and Michael Chambers are watching their small business, Melt in Your Mouth, come to life. The cupcake store they opened more than two years ago now has four employees, and they're hoping to open up additional locations. But chief among their concerns is the tax burden they face. Structured as an LLC, the company files taxes at the individual rate, paying some 35 cents on each dollar they make, Michael said, adding he's hoping for reform and lower rates under the new administration. "We are in the process of trying to open up new stores, and just paying taxes on this one is taking capital away that we could be using on something else," he said. "There is no clear-cut policy on where things are going right now. Compliance is extremely expensive for us, and it disproportionately affects us as a small business." Taxes have long ranked as a top issue for America's small businesses, many of whom file as pass-through entities, combining business and personal income and, as a result, sometimes paying a higher effective rate. In the National Federation of Independent Business' 2016 "Small Business Problems and Priorities" study, federal taxes on business income ranked as the No. 3 issue behind the cost of health insurance and unreasonable government regulations. The first-ever CNBC/SurveyMonkey Small Business Survey in June found that taxes were the No. 1 issue for 25 percent of the more than 2,000 businesses surveyed.

A model for tax reform

North Carolina, where Melt in Your Mouth is based, revamped its tax code in recent years to lower both corporate and individual rates, which had a positive impact on its business competitiveness. In fact, in 2017 the foundation's "State Business Tax Climate Index" saw North Carolina jump from No. 41 to No. 11, the largest improvement ever recorded. The rate for individuals is currently 5.5 percent, while corporations pay 3 percent, but the state legislature is also working to lower rates even further in a pending budget deal.

Michael and Julie Chambers are the mother-son team behind Melt in Your Mouth, a cupcake shop in Charlotte, N.C. They rank taxes as one of their top business issues. Kate Rogers | CNBC

"What North Carolina did is a good model for tax reform for the United States," said Joseph Henchman, vice president for State Projects at the Tax Foundation. "Find a way to broaden the base of the tax system, lower rates for everybody, and make it more pro-growth." The Trump administration is proposing parity for both small businesses and corporations in its blueprint to overhaul the tax code, bringing the rates from a top rate of 39.6 percent for individuals and 35 percent for businesses to an even 15 percent. The idea has been met with enthusiasm from Main Street advocates. House Speaker Paul Ryan also spoke out in favor of overhauling the tax code this week at the National Association of Manufacturers Summit Tuesday, pointing out the uneven playing field small businesses that file as pass-through entities find themselves on, compared to their corporate counterparts. "Here in America, 8 out of 10 businesses file their taxes as individuals," Ryan said. "In fact, most of our jobs come from these ... small businesses. Real tax reform ... means creating a new lower tax, specifically for small businesses, so they too can compete on a fair, level playing field."

Taxing issues