We haven’t reformed our nation’s tax system since 1986, when most people didn’t have a personal computer or even know about the internet. To put it mildly, our tax system is outdated and includes a lot of flaws that are hurting small businesses, hardworking American families and our country.
We need to do better! We can do better! That’s why Congress is working on a tax reform plan, which will make our tax code simpler and fairer. And these changes could provide tremendous benefits to small businesses in Wyoming and around the country.
One of the first ways Congress could help small businesses through tax reform is by putting more money in the pockets of more people — so they can better afford what they need and spend their extra money from their paychecks in their communities. This would help grow our economy and result in more jobs. More jobs lead to competition to get workers, and that drives up wages, which once again means more money in people’s paychecks. After years of stagnant growth, tax relief would be rain for an economy in drought.
Through tax reform, a roughly doubled expanded standard deduction would mean that some American families would pay no taxes. Tax reform with repeal of the estate tax would also provide relief to family farms and ranches, easing the ability to pass on successful businesses to future generations.
We hope to change business taxes. And that, too, is about helping folks. The United States has the fourth-highest corporate tax rate
s in the world at 35 percent, and that hurts American workers by discouraging investment at home. But most businesses in the U.S. do not fall under the corporate tax code. About 95 percent are “pass throughs,” meaning their income is passed along to their owners and taxed at individual income tax rates. Often this means that small businesses are facing a tax rate of almost 40 percent, even larger than the abnormally high corporate tax rate in the United States. Small businesses employ the majority of the employees in the private sector in Wyoming, and we should be encouraging them to invest more in our communities. With tax reform, these businesses would see lower tax rates. Tax reform could also provide incentives to invest in tangible assets like equipment by allowing full expensing. When we allow small businesses to thrive, so do the communities around them.
While we seek to provide tax cuts and fairness, we also need to make the tax code simpler. Right now, the code is just too long. It is five times the length of the Bible. Today taxpayers have to navigate a minefield of deductions and loopholes. If you want to make sure you are following all those rules, it’s going to take a lot of time and effort and probably means hiring someone to help. By simplifying the tax code, we could help ensure hardworking Americans aren’t missing available tax relief.
Why tax reform? Because hardworking Americans deserve better — a system that works for everyone, creates more jobs and business growth in our country and puts more money in the pockets of each and every American.