Last week, the Senate voted to pass a budget (the U.S. House of Representatives passed its own budget earlier in October). Kudos are in order for both chambers and their leadership—these are major accomplishments. But, there is more work to be done. Now, the two chambers must reconcile the two budgets and pass a final draft. Doing so—and doing it quickly—is critical to the eventual passage of the kind of comprehensive tax reform legislation small businesses need to drive meaningful, long-term growth, job creation, and wage increases.
Everyone knows the federal tax code is a nightmare—it’s too complicated, too burdensome, and creates a real drag on the economy. At 35 percent (40 percent with state and local taxes), the corporate tax rate is higher than any other industrialized nation, meaning companies face a stark competitive disadvantage when competing on the global stage. At the same time, the length and complexity of the tax code creates its own set of problems—and costs, including significant time and financial resources that must be put towards compliance every year. Especially for small businesses, this is a cost that many simply cannot afford. And on top of all of this, the tax code is massively skewed to favor large corporations at the expense of small businesses, making their climb to success that much harder.
America’s small businesses are desperate for tax reform—and thankfully, it might happen very soon. It looks increasingly promising that a comprehensive tax overhaul will make its way through Congress and to President Trump’s desk. But the timing matters. If Congress does not act before the end of the year, they will be forced to take up tax reform again in 2018, which is an election year and therefore much more difficult to get meaningful legislation passed. And if Congress delays too long, and Democrats are able to secure a majority in either chamber in the 2018 election, hope for meaningful tax reform will be lost for a very long time.
If enacted, however, the GOP tax reform bill would be a major driver of wage increases, economic expansion, and job creation. A recent study released by the White House Council of Economic Advisers found that cutting the corporate tax rate from 35 to 20 percent would spike household income by an average of about $4,000 annually, which is likely a conservative estimate. Real tax reform would mean a real, positive economic difference for hardworking families and small businesses.
While congressional Republicans should be congratulated for their efforts, time is truly of the essence. Unified Republican control of the White House and Congress is a rare opportunity. If the country is unable to take advantage of this opportunity, it will be decades before we get the chance again. And that means it’s time for Congress to pass a singular budget so they can swiftly turn to the critical growth issue of broad tax reform, and finally bring relief to small businesses who have been struggling under this onerous system for too long.
David Williams is president of the Taxpayers Protection Alliance.
Perspectives expressed in op-eds are not those of The Daily Caller.