Our economy needs a boost. No one knows this better than our struggling small business owners, here in South Carolina and across the country.
Small businesses like mine are continuously trying to serve our customers, create jobs, and grow the economy; however, complex government regulation and taxation structures make this a difficult task. We need the government to get out of the way of progress and implement real tax reform that promotes economic growth.
As Congress considers updating the tax code this year, its members must focus on reform that makes the code simpler and fairer for small businesses. We are the heart and soul of our economy, and the government owes us true reform this year.
Tax reform has been in the news for longer than many of us can remember, but there has been no true progress for decades. In fact, the last comprehensive tax reform passed by Congress was in 1986 - over 30 years ago. Since then, the tax code has become outdated, overly complicated, and punctured with loopholes, to such a degree that we have to hire expensive accountants and lawyers just to file our annual taxes. This is unnecessary, hurts our economy, and kills jobs.
Simplifying the tax code is crucial, but it is not enough. We also need a competitive business tax rate. While most of us assume that the United States is a business-friendly environment, the country has one of the worst tax structures in the developed world. In fact, we have the highest business tax rate among members of the Organization for Economic Cooperation and Development. American companies simply cannot compete in the global marketplace while shouldering this kind of competitive disadvantage.
Even businesses, like my own, that are not directly competing in the global marketplace are impacted, as the high business tax rate drives up the cost for the American-made equipment that we need to run our businesses.
The situation has become so bad that, for tax purposes, a staggering 30 million American businesses have become “pass through” entities just so they can pay more competitive personal tax rates. This leaves only 1.7 million American businesses that remain in the “traditional” corporate tax structure.
Our economy cannot reach its full potential when American small businesses are struggling. Businesses and workers are fighting every day to be more productive and to grow the economy, but our hands are tied. We need swift, positive action from our elected leaders, but it must be done right.
We need a simpler, fairer tax code and comprehensive, permanent reforms that allow businesses to plan long term. American businesses have waited long enough.