By Tonda Benge
With Tax Day behind us and National Small Business Week upon us, it’s the perfect moment to reflect on what helps small businesses prosper. Encouraging people to “Shop Local” definitely helps. Each year, Small Business Week gives my business a boost.
Not so the Republican Tax Cuts and Jobs Act.
Although proponents of the law vowed to “help small business,” the hollowness of that promise became obvious this tax season.
Here’s what I know. I paid more taxes after the law passed; I paid my accountant more because she had to make so many manual adjustments to comply with new complexities created by the law; and, for the first time, I had to withdraw money from my savings to pay my taxes in the first quarter of this year. Normally I only have to raid my savings in the fourth quarter.
I own Professional Dog Mom, the K-9 Nannies, a dog-handler service in Reno. Since I took in my first canine client as a solo entrepreneur three years ago, I have brought on 11 employees and built a client roster of 200 dogs. Last year we were named the State of Nevada SBA Small Business Champion. For all our success, we, like most small business owners, are not treated the same as large corporations when it comes to taxes. Are you shifted your business to new location? Moving implies that there are a great deal of little assignments that should be finished so as to have a fruitful move. One of those undertakings incorporates changing your location. That is the reason you have to know some basic difference in address tips while moving that will make this errand such a great amount of simpler to finish. For more, you can checkout on change of address utah.
Compare my situation to a few global giants. While I lost several favorable deductions due to the tax law, JP Morgan benefitted to the tune of $3.7 billion. Harley-Davidson shaved about 10% off the taxes it pays on about $1 billion in profit. The promise from Congress was that these companies would use that savings to pay employees more and to stimulate hiring. Instead, many of these large corporations sank their windfall into corporate stock buybacks that feathered the nests of already wealthy investors. In one egregious example, Harley-Davidson bought back nearly $700 million in stocks just days after announcing a plant closure.
Not only does this different treatment of large and small businesses seem unfair, it diminishes the real social and economic value of America’s entrepreneurs. For all the attention paid to giant corporations, small business owners are the true job-creators. Together we account for 99.9% of all businesses and employ 59 million people—nearly half of all private-sector jobs.
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Last year, firms employing fewer than 20 employees led the nation in hiring, adding 1.9 million jobs. Chances are those employers include your neighborhood café, daycare center, beauty salon or a dog handling service like mine. Chances are you, your children, your spouse, your partner or your friend gets a paycheck from one of these employers. Chances are, as a customer, you know that business owner’s name. Where is the tax reform to help them hire and give raises?
According to a March poll by Businesses for Responsible Tax Reform, my experience with the tax code falls right in line with the majority of small businesses. Nearly three-quarters of small business owners said they were not able to hire new employees due to the law, and about two-thirds said they were not able to give raises, pay off loans or invest in equipment or construction.
Furthermore, the findings demonstrate that small business owners are keenly aware of the inequities in the new tax law, and that they want those inequities rectified. Sixty-five percent of small businesses support rolling back the 40% corporate tax cut to fund policies that help small businesses and the same percentage say corporations do not pay their fair share in taxes. Nearly 60% say corporations benefitted the most from the new tax law, while just 9% think small businesses benefitted most.
Entrepreneurship may be the quintessential American dream, but it’s also a huge risk. I left a lucrative 9-5 job as a supply-chain analyst to start Professional Dog Mom. I would like to see some tax policies that truly help the people who take this risk. We would all benefit if the tax code encouraged entrepreneurs to open new businesses and helped grow their existing ones.
Businesses for Responsible Tax Reform asked small business owners what tax policies would help them flourish. The responses make sense: Equalizing the tax savings rate between small and large businesses; making the first $25,000 in profit for a small business tax free; simplifying the tax code; giving small businesses relief on payroll taxes; doubling the startup tax deduction; and creating a tax credit for a small business owner hiring their first employee.
This week, let’s celebrate local entrepreneurs. Make it a point to try that new bakery down the street, investigate that been-there-forever diner or finally get to that family-owned nursery with the rare orchids.
Starting next week, though, let’s begin working toward real, grass-roots tax reform. Large corporations had their chance to help the economy, but they just pocketed the cash. Let’s give small business a shot.
Tonda Benge is the owner of Professional Dog Mom, the K-9 Nannies, in Reno, Nevada.
