Cut Taxes, Help the Economy
By David Overfelt, Missouri Retailers Association
This summer, President Trump came to Springfield, Missouri to give Congress a simple message: The tax code is holding Americans back.
He’s right. The best way to start fixing the unfair system is with prompt tax cuts for our small businesses. “This is our once-in-a-generation opportunity to deliver real tax reform for everyday hard-working Americans,” the president said. “We’re here to bring back Main Street by reducing the crushing tax burden on our companies and on our workers.”
The time has come for Congress to follow the White House’s lead. Because most small businesses are taxed as so-called “pass-through” entities, they have to pay the highest individual rate on income—setting a baseline as high as 40 percent, which state and local taxes ratchet up even further. Taking away half of a small business’ revenue cuts off their expansion and our economic growth at the knees.
In my line of work, I’ve seen how our outdated tax code undermines the economic stability that comes with the growth small businesses provide. Rather than feeding speculative boom and bust cycles, small businesses expand our economic base in a way families all across America rely on for tangible, direct support. We’re talking increases in take-home pay for small business employees, increased hiring in the neighborhood, and improvements and expansions that put money right back into local hands.
In Springfield, President Trump also drew attention to the sheer complexity of the tax filing process, which piles on an even heavier burden. In his words: “Our self-destructive tax code costs Americans millions and millions of jobs, trillions of dollars, and billions of hours spent on compliance and paperwork.”
In fact, tax preparation consumes two full work weeks for one out of every three small businesses, according to the National Small Business Association. With small businesses making up over 97 percent of all our businesses in-state, while employing over a million workers, that kind of time-waster puts a large dent in productivity.
Polls show Americans are out of patience with the harmful impact of high taxes and complex filing. The majority of Americans say the tax code needs a major overhaul, according to a new survey by the American Action Network. Even more—77 percent—said they want tax relief to help their finances, add jobs, fuel more growth, or all of the above. These are firmly bipartisan goals. Seven out of 10 Democrats claim legislation with these characteristics should be a priority for both parties.
Sen. Roy Blunt (R-MO) has already stepped up to follow the White House’s lead. “I couldn’t agree more with the president’s call to get this done,” he says. “I look forward to working with him and my colleagues in Congress to provide much-needed tax relief for Missouri families and small businesses.”
Our 500,000 small businesses look forward to it too. According to the Tax Foundation, tax cuts the White House and Congress have put on the table would boost household wages in Missouri by $5,000 and generate over 30,000 jobs.
From Pennsylvania Avenue to Main Street, the stars have aligned for a simple yet powerful legislative win. Now’s the time for Congress to close the deal—and give us something to celebrate this holiday season.
David Overfelt is President of the Missouri Retailers Association.