This year, we have more than usual to celebrate during Small Business Week. That’s because we now have a tax code that supports small businesses owners and employees, instead of one that takes an unfair amount of their hard-earned money. With the new code enacted last December, we are promoting entrepreneurship through a fairer and simpler tax system.
This matters to our economy. Across America, there are almost 30 million small businesses that employ nearly half of our nation’s private sector employees and they create nearly two-thirds of all new jobs in the U.S. Odds are, you or someone in your family works for a small business. Small businesses are the backbone of our economy. Our nation’s entrepreneurs, who put in countless hours to support themselves and their families, are the key to our economic success.
The Tax Cuts and Jobs Act was designed to grow America’s economy by encouraging investment and job creation. It significantly lowered tax rates for businesses on Main Street and created a first-ever small business deduction to protect 20 percent of the income of sole proprietorships and pass-throughs from taxes. That helps the men and women who run small businesses invest, hire, and grow. Ultimately, it means a better shot at success for these entrepreneurs and the people who work for them.
These policies are already working. According to the National Federation of Independent Business, the share of small businesses planning on raising wages and creating new jobs is at historically high levels. Bank of America has also reported that 58 percent of small business owners credit tax reform as a “game-changer for small business overall.”
More generally, in just the five months since the tax law went into effect, economic forecasts have been revised upward, unemployment claims have reached their lowest level since the 1960s, and wages are growing at their fastest pace since 2008. A recent report from LinkedIn shows hiring has jumped up for several key industries including manufacturing, automotive, and aerospace.
After years of struggling to keep family businesses afloat under former President Barack Obama’s stagnant economy, Main Street optimism is booming and small businesses are expanding, all to the benefit of American workers – and this is just the beginning. According to the nonpartisan Congressional Budget Office, the legislation will create 1.1 million jobs, raise real wages by $1.2 trillion, and boost investment by $600 billion over the next decade.
This means real change for real people. I am hearing from entrepreneurs across my communitywho are excited again about the future of their businesses. One Texas business owner, Russell Inserra, who runs a marine construction company, recently shared that thanks to tax reform this now looks to be his company’s best year ever. He’s been able to give his employees up to 11 percent raises and is looking to invest about $5 million in new equipment.
These are not crumbs, and small business owners and employees are right to be excited. That’s because our new code allows the entrepreneurs we celebrate this week to do what they do best – innovate and grow their businesses.
So this year during Small Business Week, we should celebrate not only all entrepreneurs and small businesses owners and employees across America, but also our new tax code, which will power a new era of American entrepreneurship and economic growth.
Rep. Kevin Brady, R-Texas, is chairman of the House Ways and Means Committee. He represents Texas’ eighth congressional district.