Instead of tricks, give businesses a treat
Published 9:32 pm Wednesday, October 25, 2017
By John Sims
For children who attend the child care center I run, Halloween can be a spookily fun time, filled with tricks and treats.
But nothing is more frightening to a small business owner like me than the federal government and its tax-collecting arm, the IRS.
For small businesses like mine, the federal tax burden can be overwhelming and induce financial fear and stress. It’s not difficult to see why. My business is structured as a pass-through entity, which means 40 cents of every marginal dollar earned goes to Uncle Sam.
And I’m not alone in this ordeal. Ninety-five percent of U.S. small businesses are set up the same way and suffer the same hardship.
Not only is the high tax rate itself scarier than a zombie costume, but the regulations and complications associated with the tax code make it difficult to navigate, which only adds to the expense and wasted time.
In fact, the tax code is so long and complicated that I have to pay thousands of dollars for a professional accountant to wade through it. It makes no logical sense.
Thankfully, our lawmakers in Washington are addressing the problem.
A number of ideas have been floated. They’ve included tax relief for corporations, tax cuts for small businesses and the middle class, and a simplification of the tax code, to name a few. All of these proposals would result in significant economic benefits for the country.
A reduction in the corporate rate would make U.S. industry more competitive abroad, and a simpler tax code would allow every American to file his tax forms without an army of expensive tax professionals at their side.
While efforts to make these ideas a reality are noble, they may be too politically challenging to accomplish in the short term.
Instead, we need to focus on the doable and what will help Americans the most. The obvious solution is tax relief for small business entrepreneurs and the Main Streets they serve.
Everyone can get behind small-business and middle-class tax cuts. It’s a win-win policy that would bolster Virginia’s nearly 700,000 small business entrepreneurs, who are responsible for two-thirds of all new job creation.
Giving Virginia small businesses like mine the financial footing to invest back into their businesses by hiring more people, raising wages, and expanding to new locations is what will drive strong economic growth and bring financial and job security back to the most vulnerable Americans.
It’s also a popular idea among the public. According to a September survey from NBC News and the Wall Street Journal, a majority of Americans reported small business tax cuts would be economically beneficial. Another poll from ABC News and the Washington Post reveals 78 percent of Americans favor a tax cut for the middle class.
It’s time that our elected representatives in Washington reduce the tax terror felt by Virginia small business owners, as well as those across the country.
I’m happy to give away bags of lollipops and candy bars on Halloween, but I am less inclined to let the federal government reach into my business’s trick-or-treat bag all year round.
John Sims is the owner of a Rainbow Station child care franchise.