Entrepreneurs Weigh in on Tax Reform: Access to capital, competitiveness, growth and quality jobs

By at 7 December, 2017, 10:09 am

On December 5, we hosted a media teleconference call where SBE Council president & CEO Karen Kerrigan and chief economist Ray Keating covered specifics of the two tax reform bills advanced by the House and Senate, and the need for reform and relief for our economy and entrepreneurial success.  Entrepreneurs Derek Volk, owner of Volk Packaging Corp, Biddeford, Maine; Keith Smith, President, Vonco Products, Trevor, Wisconsin; and Daniel LaVan, Managing Director of EnerG3, Chattanooga and Nashville, Tennessee joined the conversation and discussed the benefits of the bills – lower rates, more capital, expensing, benefits on the individual side, and a growing and sustainable economy – for the health of their business and local communities.

Listen to the 30 minute teleconference here.

Here are some excerpts of what these small business owners had to say about the need for reform and the benefits of the “Tax Cuts and Jobs Act:” 

Derek Volk, owner of Volk Packaging, Biddeford, Maine:

“What I’ve been saying to people throughout this whole thing is that small businesses like mine, we drive local economies. I mean, we provide 90 families with good jobs. Last year alone we donated to over 100 local charities…that’s how we want to spend our money. We don’t want to spend our money sending it to Washington DC – where who knows how it’s used and how it’s spent and frankly how it’s wasted. So, we are totally supportive of this tax cut. We hope that it reaches all companies in America because we want to see that impact for all 1000 of our customers.”

Daniel LaVan, Managing Director, EnerG3, Tennessee:

“The Senate bill in particular addresses the double taxation aspect. And right now, we are taxed locally on profits in local entity and then what happens is we have a global tax system in the United States where I have to do another whole tax return in order to see if I also owe the U.S. government on that. That makes me competitively disadvantaged. I had that experience as both an ex-pat for large organizations, as well as a local business and that is a competitive disadvantage to American businesses that are doing anything internationally whatsoever.

And the new bill also allows us to repatriate profits at a much, much lower tax rate. And that incentivizes us to reinvest in our workforce as most of our core engineers and such are coming out of the greater Chattanooga and Nashville area. 

The ease. Just think about the burden of redoing my tax return for the U.S. government after I’ve already done one for another country. And then the alternative minimum tax requires me to do it again in order to make sure I’m paying my alternative minimum tax on it.”

Keith Smith, President, Vonco Products, Trevor, Wisconsin:

“…we strongly support pro-growth tax reform. Our current tax code is a bit of an impediment. We need as much access to capital as possible. We just moved into this facility in Wisconsin. We built the building. We equipped it with brand new equipment and we spent $12 million. For a small business this is a big recapitalization effort of a very mature business.

We have even further plans to accelerate the growth and want to spend even more money to continue on an even more rapid pace of employment, training and wage growth. And we would love to see the pro-growth tax reform bill pass to reinvest in our company, accelerate hiring and increasing salaries.

As manufacturing jobs become more reliant on higher skilled employees, meaningful tax reform would allow us to fund training. Funding the training allows our employees to stick around more and increase their value to our organization, thus increasing their salaries.

But tax reform is important for more than just our company. Estimates by the Tax Foundation predict that Tax Cuts and Job Act will help our state grow by at least 18,700 full time or equivalent jobs and help middle class families bring home more of their hard-earned money every year. So, all my employees will have more money to spend, thus accelerating the economy. Estimates are projecting at least $2600 for each family after-tax income.”

Listen to the 30 minute teleconference here.

See SBE Council’s summary here that lists the differences in the House and Senate bills.

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