It has been 30 years since the last time our nation’s tax code has been overhauled. In that time, the tax rate we levy on businesses has become one of the highest in the world, the tax code itself has become an incomprehensible mess, and special interests have drilled it full of loopholes that benefit narrow constituencies.
The only bright spot is that bipartisan support to reform the tax code is at an all-time high right now. According to one recent poll, 81 percent of Americans say tax reform should be among the top priorities of Congress.
It is obvious that the time is now to pass a tax reform package and it certainly appears that Congress is close to getting the job done. They just need one last push to achieve tax reform before the end of the year.
Modernizing our tax system is especially important for small businesses. Small-business owners spend a disproportionate amount of time on tax compliance, and they can’t afford the teams of CPAs and tax lawyers employed by large businesses.
Increasingly, small businesses are competing in a global marketplace. Under our current tax code, that extraordinarily high 35 percent tax rate we levy on businesses put us at a competitive disadvantage right out of the gates. Lowering business tax rates is the only sensible thing to do if we are to expect American entrepreneurs to excel on the world stage.
The resources that small businesses currently invest in compliance will be reallocated to more productive endeavors if the proposed tax simplification measures are implemented. That means resources to invest in expanding businesses, hiring new workers, and raising wages.
In fact, the Tax Foundation projects that the proposed tax reform package will create 975,000 new jobs and result in a boost in our GDP by nearly 4 percent. They estimate that economic growth will translate into a $2,600 increase in wages for the average middle-income household.
Those wage increases are on top of the tax savings that Americans will enjoy under the plan. The package passed in the House of Representatives doubles the standard deduction for middle-class families, simplifies filing and closes loopholes to make sure everyone pays their fair share.
We are close to achieving reforms to our country’s tax system. However, Congress is not quite across the goal line yet. That is why all Montanans should weigh in with our congressional delegation to let them know that there is significant support for the tax reform package.
Tax reform is important for Montana’s small business owners — who provide the majority of employment opportunities in our state and form the backbone of our economy. It is also important for families of all income levels, who will experience a much-needed boost in the form of lower taxes and higher wages.
Let’s get this done before the end of the year. Let’s start 2018 off in a positive position for our country and our state to grow and prosper. Let’s all encourage our congressional delegation to pass tax reform now.