GOP Tax Bill Will Actually Help Small-Business America
It's cool to hate Trump. It's cool to hate the GOP. In fact, these days it's pretty cool to hate America. The mainstream media have given birth to these ideas, and they continue to hammer them home, no matter the cost.
Most recently, it's the new GOP tax plan (which is actually two separate yet similar proposals in the House and Senate) that's caught the attention of the liberal media. Reporters, left-wing pundits, and Democratic politicians have plucked little pieces of the plan out and examined them in isolation – thus losing context – and made outrageous claims. Read a handful of articles from the left, and you'd think the country were coming to an end.
While the plan is far from perfect – something many people on both sides of the party line have publicly spoken out about – the extreme animosity is a little puzzling. Yes, big businesses and wealthy individuals get some pretty nice breaks, but so do the rest of us.
Most confusing of all, perhaps, is the idea that the GOP tax bill is going to hurt America's middle class and harm small business-owners. If you step out of the echo chamber the media firestorm has created and actually read through some of the bill, you'll realize that it's highly beneficial to small businesses.
GOP Tax Bill: Helping Small Business-Owners Everywhere
Meet entrepreneur Mary Schiavoni. She's a pediatric speech pathologist and the founder of a series of treatment tools known as "Chewy Tubes," as well as a line of baby teethers, made in the United States.
In a recent piece for the Washington Examiner, Schiavoni expressed her bewilderment that nobody is really talking about the 20-percent small business deduction that's included in Congress's new plan. For a business that earns $200,000 annually, that means that $40,000 is totally tax-free. For businesses that are currently burdened by taxes, this is a huge relief.
"I currently employ five people," Schiavoni explains. "This tax cut would allow me to provide bonuses for current employees, hire more employees, expand my workspace, and purchase inventory."
"To prevent this provision from being a tool of wealthy small businesses, like investment and accounting firms, it is ... available [only] to those making less than $315,000 a year. The overwhelming majority of small businesses earn below this threshold, meaning [that] the overwhelming majority would benefit" Schiavoni rightly states. "For small business[-]owners who are responsible for nearly two thirds of new job growth in this country, that's a big win."
The Senate's tax bill is even more generous, proposing a 23-percent deduction. Again, the benefit for small business is clear.
"The ability to protect nearly one quarter of my business income from taxes will give me the ability to expand my drive-in movie theater operations, hire more employees, and give my existing employees raises," explains Susan Kochevar, CEO of 88 Drive-In Theatre. In fact, she believes that this massive deduction would level the playing field and allow her to compete with larger cinemas that can afford skilled accountants who are paid to find tax code loopholes.
Once again, this tax deduction is limited. In the case of the Senate's proposed bill, only small businesses earning $500,000 or less have the right to claim the 23-percent deduction.
"That's why I'm confused about the media characterization of the bill as a gift to the wealthy at the expense of the middle class," Kochevar says. "As this small business provision demonstrates, this narrative is backwards."
When small businesses have the freedom to reinvest in themselves, they're also going to reinvest in the economy as a whole. A small business-owner who is doing well financially is much more likely to take out a personal loan to perform a home renovation, as he's confident in his ability to pay it back. A small business-owner who is more profitable in his business dealings will have a few thousand dollars more in his pocket each year to take a vacation and inject money into other cities and states. A small business employee who gets a bonus as the result of the deduction is more likely to buy a couple of extra Christmas presents for his kids, which helps other small businesses.
It's a cycle that feeds itself. The left fails to see this. All the leftists see is "corporate greed."
Helping Big Business Help Small Business
Will the proposed GOP tax bill help big businesses? Absolutely – there's no questioning this fact. But why is it such a bad thing to give American companies tax breaks? What few on the left realize is that giving big companies a boost actually helps the rest of us, small businesses included.
"My most profitable clients are big companies," small business-owner Gene Marks admits. "Many of my small clients rely on corporate customers for their growth and income. Big companies hire small businesses to do all sorts of things – from construction to maintenance to landscaping to computer repairs to providing temporary workers. Big companies also employ people who – when times are good and their salaries are increasing – go home and buy pizzas, hire landscapers, shop for clothes[,] and shower the small businesses in their community with the fruits of their disposable corporate incomes."
It's Up to Businesses to Respond
If you actually read the proposed tax bills and do your research, independent of the biased influence that the mainstream media push in their glorified echo chamber, you'll clearly see that they're good for business. Big business, small business – everyone benefits.
When you look at the top-line numbers, it's easy to say greedy big businesses are the winners and small businesses are the losers, but that's simply not true. The top-line figures don't matter. You have to look at it practically and proportionally. If you view the tax plan through these lenses, it's clear who the real winners are.
In the end, it's up to businesses to respond. When they get these tax breaks, are they going to hoard their money? Or will they use it to increase wages, spark innovation, and stimulate the economy? Lawmakers are doing their job – it'll be up to business-owners to pull their weight after the bill is passed.