This fall, Congress will be turning its attention to tax reform to provide sorely needed tax relief to all Americans. The Federal Reserve’s recently released economic well-being report finds that nearly half of Americans cannot afford an unexpected $400 expense, like a car repair or medical bill.
These figures emerge despite the fact that the stock market is at an all-time high and the unemployment rate is at a historic low. The reality is American families are still struggling to “get ahead.”
We, federal policymakers, must help people that work every day by pursuing middle class tax cuts, as proposed by President Trump and Congressional Republicans.
Tax reform would put meaningful dollars back in the pockets of hardworking taxpayers to help them cover rising housing, healthcare, and childcare costs. Allowing Americans to keep more of their hard-earned dollars would also improve local economies by keeping money in communities, rather than sending a credit card to Washington bureaucrats with the American taxpayer footing the bill.
Just as many families have been overlooked by the economic recovery, so have many mom and pop shops and small businesses. I spent my career in business, so I know the complexity of our tax code. Communities across the country are stagnant, in large part because small business owners face an overwhelming tax burden. Small business tax cuts would help businesses keep their doors open and even grow.
Small businesses create two-thirds of all new jobs and half of existing jobs, so in many ways, they are a barometer of true economic health. A recent national poll of small business owners by the Job Creators Network shows that most respondents would reinvest their tax savings in their businesses in the form of wage hikes, new jobs, and expansion.
These benefits would help the economy get back to its historical standard of three percent or greater growth – up from the two percent average of recent years. One percentage point difference in economic growth may not seem like a lot at first glance. But it is actually the difference between the economy doubling in 24 years versus 36 years — or an extra time each lifetime.
It’s been over thirty years since the last time tax cuts were broadly lowered on the middle class and small businesses. In that time, the economy has changed significantly. Yet the tax code remains in the era of the fax machine, Walkman, and Atari. In fact, Americans spend eight hours on average filing their taxes, and small business owners spend much longer. The code must be simplified — in addition to reduced rates — so families and small businesses can understand and file taxes themselves.
Real tax reform is needed to expand the economic recovery to all Americans. I look forward to working with my colleagues to deliver tax relief to American families.