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Pensacola News Journal: Congress needs to act on tax reform this year
Friday, September 01, 2017
By Michael Myhre
In June, I had the pleasure of travelling to Washington D.C. along with the Florida Chamber of Commerce to discuss tax reform on behalf of the Florida Small Business Development Center (SBDC) Network. Many people do not realize that Florida boasts the second highest business ownership rate in the nation – 97 percent of which have 20 or fewer employees. However, these small businesses are struggling to grow and create jobs with the overwhelming burden of hefty U.S. taxes weighing them down. That’s why tax reform must be a top priority for Congress this year. We cannot keep hindering the growth of small businesses any longer.
Under the U.S. system, small businesses can pay tax rates as high as 44.6 percent and, collectively, spend over 240 million hours and $19 billion annually to comply with our exceedingly complicated tax code — considerable time and money diverted from running their business. If we want to fuel a strong job market and attain high economic growth, lawmakers must simplify the tax code, while paying mind to the needs of small businesses.
Paying attention to the needs of small businesses means paring down the exorbitant corporate tax rate. The U.S. has the highest business tax rate in the industrialized world, and yet we expect our companies to grow and expand all while competing with international businesses that aren’t subject to the same oppressive restrictions. Reducing the tax burden on these companies will allow them to hold on to more of the capital they generate, while simultaneously giving companies the opportunity to invest in the American workforce, keeping more jobs from going abroad.
Our nation’s tax code remains unchanged over the past 30 years, and the consequences of this inaction is clear. While our rates remain high, business tax rates internationally have decreased. Companies who once happily contributed to the American economy have fled overseas. Modernizing our tax code to set fair rates and close corporate loopholes will ensure that American businesses remain in America. It’s time to give Americans a tax system that doesn’t constantly work against them and move towards a system that allows them ample opportunity to grow and innovate.
Ideally, the reformed tax code would shift profits from the non-job creating government over to the job-creating small business sector. It would lower the corporate tax rate from 35 percent to the more competitive rate of 20 percent and keep taxes on small businesses under 25 percent. Making these changes would significantly reduce the cost of capital and reduce the marginal tax rate on labor. Simplifying the code would also greatly reduce both the time businesses spend filing taxes and the cost of tax compliance.
Speaking as someone who has spent their entire professional career helping small businesses grow and succeed, I can confidently say that tax reform is necessary for sustaining a strong job market and achieving elevated levels of economic growth across the nation. It is for this reason that I urge lawmakers to work together to ensure tax reform is passed this year. The time has come to create more jobs, jump-start the economy, and foster innovation — and bold tax reform is the only solution.
Michael Myhre is CEO and Network State Director of Florida SBDC Network.
Read here: http://www.pnj.com/story/news/2017/09/01/congress-needs-act-tax-reform/625259001/