The U.S. House of Representatives Committee on Small Business held a hearing on this topic today while at the same time Congressional Republicans released a general framework of a plan to make tax cuts for small businesses and individuals permanent.
The temporary (ending in 2025) tax benefits for individuals and most small businesses has been a criticism of the new tax law—but not the only or most important one.
So, is it a good idea to continue to explode the national debt beyond the $1.9 trillion the tax law will add over the next decade by locking in permanently the few benefits for individuals and small businesses (the 40% tax rate cut for corporations is permanent)?
Small business owners might be tempted to take the measly tax benefits we received and want to just keep them.
But the real problem with the tax law is not the temporary nature of the small business benefits. It’s the law itself that was sold as a boom for small businesses, American families and the economy. None of those promises have come to pass and we’re already six months into the tax law.
As many of you know, I also serve as co-chair of Businesses for Responsible Tax Reform, a coalition of business leaders calling for tax reform that truly benefits American’s small business owners.
We put out a statement today outlining why making permanent the paltry small business benefits in the tax law is the wrong approach.
The Main Street Alliance had one of its members testify today at the House Small Business Committee hearing.
Both business organizations conclude that Congress needs to revisit the seven-month old tax law and fix it so that it actually benefits small businesses and American families instead of just adding more profits for big corporations and money in the bank accounts of the wealthy.
If you want to see a real take-down of how the tax law has performed compared to what the supporters are saying, check out this July 21st analysis by MSNBC. VP Pence sure looks credible with his even-tan and neatly cropped white hair, but the reporter exposes his statistics as just more misleading propaganda.
Then there is the ever-shrinking promise by the tax law supporters as to the benefits for working Americans.
Before the law passed last December, the White House promised that the law would give a $4000 raise for the average American family.
After six months of the law being in effect and those benefits not showing up, it was time for a revision.
On July 23rd the pro-tax cut Heritage Foundation released new research saying that the average household could now expect only a $1,400 raise.
Don’t look for that prediction to hold up either.
The GOP tax law simply isn’t working as promised for small businesses and working Americans.
The economy might be doing well now but this won’t last. Because of the tax cuts given to corporations, revenue to the U.S. treasury from corporations is the lowest in 75 years.
If Congress adds even more fuel to the national-debt fire by buying mid-term election votes by giving more tax revenue away—even if it is to those who deserve it—any small benefit the non-corporations and non-wealthy receive will evaporate in the next recession.
The next Congress must quickly take up tax reform again, re-structure the corporate tax rate cut and this time put small businesses and working American’s at the top of the priority list.