GOP has made things better for the small businesses that drive our economy
Author: Dave Williams - May 7, 2018 - Updated: May 7, 2018
Last week was National Small Business Week, an annual recognition of the big role that small businesses play in the country’s economic success.
Small businesses drive local and national economic growth, job creation, and innovation, providing livelihoods for one million Coloradans and their families as well as improving the livelihoods of the rest.
And this year there is much to celebrate. Small business sentiment is currently at a record high. Colorado’s unemployment rate is at 3 percent. State business creation is strong, rising 10 percent — more than 120,000 new businesses — over this time last year. And an optimism pervades our Main Streets that hasn’t been seen in decades.
This success is largely a result of Republicans at all levels of government working to pass pro-business reforms to make it easier for small businesses to thrive.
Exhibit A is the new tax code passed into law late last year by Congressional Republicans. In addition to lower rates and simplification, It includes the biggest small business tax cut in the country’s history in the form of a new 20 percent small business tax deduction. This allows small businesses to protect one-fifth of their revenues from taxation, which can be used to expand, invest in new product lines, and hire new employees.
This is exactly what’s happening in Colorado and across the country. Consider Canary LLC, a Denver-based oilfield service company that’s using its tax cut savings to “furiously” hire more employees and invest. “What the tax reform package is allowing us to do is really dial up our capital spending even more, so we are going to try to achieve 50 percent revenue growth next year in 2018 over 2017,” said CEO Dan Eberhart.
Similar stories are occurring across the state and nation. In addition, more than four million U.S. employees have received increased compensation from their corporate employers, including Walmart, AT&T, and American Airlines, because the new tax code also brings the corporate rate in-line with international standards.
And the best is yet to come. Earlier this month, small businesses filed their first quarter taxes — their first filing under the new regime. As more of the nation’s 29 million small businesses learn about the new 20 percent deduction, expect even more investment and economic growth.
Billions of additional dollars remaining in our communities as a result of tax cuts rather than being shipped off to Washington D.C. stimulates spending, investment, and wages growth. As a result, the non-partisan Congressional Budget Office recently raised its growth forecast for this year to 3.3 percent, about 75 percent higher than the last year of the Obama Administration.
The higher standards of living that are part of economic growth help everyone but especially those who need it most. I agree with President Ronald Reagan’s statement, “The best social program is a job.”
And it’s small businesses that provide two-thirds of the new jobs in this country. So policies that help them help everyone.
Yet these gains could prove temporary. Democrats have promised to repeal these tax cuts if they retake Congress in the election this fall. House Minority Leader Nancy Pelosi has called tax cut-induced pay increases “crumbs.” (Surely they are to her, whose net worth is $43 million, making her one of the richest members of Congress.)
So this week, take a moment to reflect on everything that small businesses do for the community and economy. But also take time to appreciate the conditions that allow small businesses to flourish in the first place and how these must be protected and expanded. For everyone’s sake.