A bipartisan agreement in Washington is shaping up to be a win for small businesses and the entire U.S. economy. Earlier this month, Congressional committee leaders announced a tax reduction agreement It reinstates lapsed elements of the 2017 Tax Cuts and Jobs Act. Key features include expanding small business deductions and reinstating full spending on research and development.
Congress should move quickly on this proposal before tax filing season officially begins. With Main Street struggling, these changes would be a welcome economic boost.
Although inflation has moderated, wholesale prices, the prices that small and medium-sized businesses often pay, are 20% or more Over the past three years. A budget black hole has left employers struggling to cover wages, overhead and equipment costs. Additionally, rising interest rates are making access to credit that could help fill these gaps more expensive. January voting Nearly two-thirds of small businesses revealed They are concerned about rising borrowing costs.
The regulatory backdrop also contributes to Main Street's dilapidated appearance.
For example, the Biden administration is developing the following policies: new rules for compromise small business franchise system, reduce flexibility of independent contractors, and jeopardize the protection of intellectual property;. Unlike large corporations, small employers have limited resources to navigate increasingly complex government red tape. Change hits them the hardest.
As the founder and president of a small manufacturing company in rural Pennsylvania, I'm familiar with the challenges faced by entrepreneurs. Although my business is now successful and employs over 150 people, from administrative staff to highly skilled engineers, it hasn't always been sunshine and rainbows. It was tough in the early days.
I mortgaged my house seven times to keep the company afloat and ran it in the red for two and a half years. And that was nearly 30 years ago. We salute entrepreneurs who are able to successfully start and sustain a business given the economic realities of 2024.
Reinstating the tax cuts in Congress is an opportunity to once again smooth the path to small business ownership. The proposed changes would restore tax laws that allow businesses to keep more of their own money while fostering economic growth through research, development and investment. This move will revitalize the country's economic engine while driving innovation that will improve living standards.
The rapid growth of the economy after the initial passage of the 2017 tax cut package is proof that this strategy is working. For example, immediate spending on capital equipment was game-changing.
My company and its employees provide an informative snapshot. Armed with the resulting tax savings, they were able to build a new laboratory, invest in new chemical compounding equipment, and purchase a state-of-the-art packaging line. On the human capital front, employees enjoyed increased bonuses, a new 401(k) program, and dozens of new colleagues.
With the right policies in place, more companies, like mine, will have the opportunity to expand and grow, and can replicate our success.
Congress's tax reform agreement is a step in the right direction, but it's by no means a silver bullet.change Extended only until 2025 The remaining portions of the Tax Cuts and Jobs Act, which contained a wide range of tax cuts, would also be repealed. This schedule emphasizes the need for a larger and longer-term agreement next year.
The current Congress can start the job, but it will be up to policymakers to finish it in 2025.
Guy Berkebile is the founder and owner of Guy Chemical in Somerset, Pennsylvania, and a partner in the Job Creators Network Foundation.
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