The House of Representatives recently passed the Tax Cuts and Jobs Act, which urges the Senate to proceed with their tax cut bill. For our country’s struggling small businesses, such tax relief is long overdue.
The House’s version of the tax cut bill proposes a nearly 40 percent reduction in the small business tax rate, lowering the tax burden to a more manageable 25 percent. It also established a nine percent small business tax rate on businesses earning less than $150,000 a year. This significant tax cut will allow businesses in North Carolina and across the nation to invest their earnings locally instead of being squandered away in an undrainable swamp.
North Carolina has a strong history of producing many successful businesses. Entities such as Bojangles, Cookout, and Krispy Kreme are economic giants that reach a unique set of consumers, but they all come from the same humble beginning: A new idea and a founder who was willing to risk everything.
Future businesses deserve similar opportunities. Shouldn’t our nation’s tax code encourage companies to innovate, grow, and expand, rather than punish them for finding success?
That sentiment is why a clear majority of North Carolina voters in 2016 specified “fixing the economy” as the most important issue facing the nation, and 47 percent of citizens currently believe cutting taxes is the best approach to achieve that goal.
North Carolina small businesses employ nearly half of our state’s workforce and account for more than 34,000 net new jobs. The future of our economy is dependent upon their ability to grow and prosper. The American dream connotes the idea that hard work and determination guarantee success. But with a majority of Americans working more hours in an economy of relatively stagnant wages, that dream is put further out of reach by the federal tax code.
I was proud when the North Carolina General Assembly passed one of the most comprehensive tax reform packages in modern history, and the impact of the “Carolina Comeback” on our economy continues to be transformative.
Following the reduction of both individual and corporate taxes, state revenue has continually increased, over 385,000 jobs have been created, and unemployment has decreased nearly four percent Those concerned about the federal tax cuts’ deficit implications need only look at North Carolina’s experience to see that tax cuts can raise revenues.
House Minority Leader Nancy Pelosi recently told Democrats to oppose all tax reform legislation so “[Democrats] will be in the majority.” I find this manner of governing disheartening.
Struggling business owners do not care about petty politics. They care about serving their customers and supporting their employees through increased compensation.
Economic evidence illustrates that at least a portion of business taxes are paid for through employee wage reductions. Significant tax cuts, however, would incentivize employers to raise wages by thousands of dollars — money Pelosi and other Democrats would prefer stay with the federal government.
Politics should not interfere with individuals and families being provided an opportunity to make a better life. It is time for Congress to prioritize our nation’s leading job creators. It is time for them to pass small business tax cuts.
Scott Crosbie is the president of Artisan Signs in Cornelius, North Carolina.