A BIG Week for Tax Reform: Entrepreneurs and the Economy Need the Positive Boost

By at 30 October, 2017, 9:29 am

by Karen Kerrigan-

On October 27, the Bureau of Economic Analysis reported that the economy grew at 3.0 percent in the third quarter of 2018.  In a media release, SBE Council observed that stronger growth is being driven by high confidence among businesses and consumers and that continued progress on key policy issues – such as tax reform and regulatory improvements – will drive increased levels of investment, entrepreneurship, quality job and wage growth, which will produce the sustainable dynamism our economy needs to improve the financial condition and opportunity for all Americans.

SBE Council president & CEO Karen Kerrigan said: “The GDP data reaffirms the unbroken confidence that small business owners and entrepreneurs have about the economy, the business environment and their prospects for future growth. Positive, pro-entrepreneur policies are making a huge difference in their confidence and the performance of the economy. They are investing more, and consumers are following that lead and optimism by spending. Tax reform is key to fueling this confidence and growth into 2018, as it will put more resources and capital into the hands of entrepreneurs for investment, which will drive the strong and sustainable growth that has been missing for the past decade.”

Tax Reform Marches Forward

On October 26, the U.S. House passed H. Con. Res. 71, the Fiscal Year 2018 Budget Resolution, and SBE Council praised members who voted in favor of the budget resolution, which moves the nation one step closer to tax reform and a more prosperous and dynamic economy for all Americans.  SBE Council KEY VOTED the House vote, which president & CEO Karen Kerrigan said was critical to advancing tax reform for small businesses and entrepreneurs in 2018:

“Tax reform is currently the most critical issue for entrepreneurs and small business owners. Transforming the tax system to one that encourages entrepreneurship, investment and small business success will foster the sustainable growth our economy needs to provide financial security and opportunity for all Americans. Passage of the Senate-passed budget resolution by the House today means tax reform for America is in clear sight.”

On October 19, the Senate advanced the FY18 Budget Resolution (see SBE Council’s media release here.)  The House Ways and Means Committee is expected to unveil the tax reform package on November 1.  SBE Council will be watching several key elements in the package, among them:

• The lower business tax rates as agreed to in the unified tax reform framework.
• The rules on pass-throughs to ensure they do not unintentionally or intentionally erode the lower rate for small businesses, which is critical to their capacity to invest, grow and compete.
• Death Tax repeal – no compromises. Also, AMT repeal – both were agreed to in the unified tax reform framework.
• Robust and “unprecedented” expensing as agreed to in the unified tax reform framework. Obviously, we will review the details.
• Does the proposal advance simplicity? The tax system needs to be modernized and made more practical for “gig” economy workers, the self-employed and all small businesses (sound reforms were offered in the House Small Business Committee’s bipartisan H.R. 3717, the Small Business Owner’s Tax Simplification Act, strongly supported by SBE Council.)
• A territorial vs. worldwide tax system.

This week is a big week for tax reform.  The details of the House Ways and Means plan will emerge. How the business community responds following release can fuel positive momentum for House passage.  If the plan closely mirrors the business and pro-growth provisions announced in the unified tax framework, the package will move forward on a much smoother basis.

Related Content:
Economics 101: Cutting the Corporate Income Tax
SBE Council chief economist Ray Keating explains the basic economics behind cutting the corporate income tax rate.

Small Businesses Remain Positive in New Survey
Chief economist Keating points to a new small business survey showing improving confidence on expected growth, profits and hiring. The lone exception seems to be on the financing front.

Karen Kerrigan is president and CEO of the Small Business & Entrepreneurship Council     

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