Tax relief is nearing the finish line. The House voted 227-205 Thursday to pass the Tax Cuts and Jobs Act, putting the ball in the Senate’s court. We can still hope for lower taxes by the end of the year.
It’s too early for small business owners to breathe a sigh of relief, but momentum is on our side. The Tax Cuts and Jobs Act would slash the tax burden on small businesses like mine from 39.6 percent to a much more manageable 25 percent.
Under the current tax code, many small businesses are taxed at the top individual rate, which can reach 50 percent of business income when state and local taxes are accounted for.
The House tax plan would also allow for immediate expensing, ensuring that small business owners can write off the total cost of a business expense in a given tax year instead of spreading tax savings out over numerous years with a depreciation schedule.
In real terms, immediate expensing would allow restaurants and other small businesses to save money on investments, such as a larger kitchen or more bar stools. This leads to business expansion and job creation down the road.
As the owner of Don Ramon Restaurant in West Palm Beach in Florida, I understand the positive impact of small business better than most. My husband, Juan, and I take pride in providing our guests a true Cuban experience, from cultural events to homemade carne con papas.
Juan’s love for music brings out the rhythm of the old and modern-day Cuba, differentiating us from many chain restaurants.
Coming from two troubled countries – Cuba and Nicaragua – my husband and I appreciate the many opportunities that the American Dream has given us. And we are honored to give back to our local community of West Palm Beach.
We not only provide authentic food and a unique dining experience, but also participate with many local nonprofit organizations and in local government activities that benefit West Palm Beach.
Unfortunately, I also understand the pitfalls of the current tax code, which diverts resources from business investment to seemingly endless government coffers. High taxes make it costly to invest in new construction projects and needed renovations. A complex filing process has limited us to fixing only Don Ramon’s most necessary mechanical problems.
A lower tax rate would make it easier to reinvest our hard-earned income into restaurant improvements, keeping up with the wear and tear of our building and equipment. It would also help us develop new marketing strategies to survive in the competitive food-service industry, where profit margins are slim and restaurant closures are commonplace.
Most importantly, lower taxes would leave us with more resources to reward our hardworking employees. We would gladly invest in more paid vacations and more lucrative retirement plans, in addition to education and training programs.
Imagine the positive impact of tax cuts nationwide. America is home to nearly 30 million small businesses that employ 60 million workers – roughly half of the U.S. workforce. Their employees stand to benefit most from pro-growth tax cuts that encourage private investment.
We are on the right track. Over the next decade, the Tax Cuts and Jobs Act would create an estimated 890,000 new jobs and boost middle-class incomes by nearly $2,300. The reason is simple: When the federal government helps job creators like me, our employees can reap the benefits.
Now it’s time for the Senate to get us across the finish line. Anything less is unacceptable.