Entrepreneurs need certainty, not higher taxes, to succeed

As lawmakers return to Washington, D.C., after a long and hard-fought election season, they will begin to set priorities for the upcoming session. The economy and inflation remain the top concerns for Americans and small businesses. We need to make sure we embrace policies that help them thrive. Extending the 2017 tax law is a crucial step toward providing small businesses with the security they need.

The 2017 tax law transformed the small business landscape, enabling owners to reinvest more earnings into their operations. This spurred job creation, investments in new equipment, and the launch of new ventures. By lowering the tax burden on small businesses, the law fueled historic wage growth and brought unemployment to record lows.

Lawmakers can either increase uncertainty by raising taxes or negotiate in good faith to build on the 2017 reforms.

Policymakers should always aim to support economic growth and stability. The road map Congress laid out six years ago remains clear. Neither Congress nor the next president should undo those reforms so soon, especially while high inflation and interest rates strain entrepreneurs. Lawmakers must assess potential outcomes carefully. If there is no agreement on lowering rates, why not maintain the current tax levels instead?

During my time at the U.S. Small Business Administration’s Office of Entrepreneurial Development, we helped thousands of entrepreneurs nationwide start and grow their businesses. Washington’s economic policies played a crucial role in our success. Today, I worry that lawmakers are too eager to raise taxes on small businesses instead of exploring ways to help entrepreneurs invest more in their employees.

The Tax Foundation’s latest research shows that avoiding corporate tax increases could boost U.S. economic output by 1.7%, wages by 1.5%, and employment by 381,000 full-time jobs. These gains would come at about half the cost of the Inflation Reduction Act’s green energy tax credits and the CHIPS and Science Act’s tax credits, grants, and spending programs.

I understand where our new incumbents and candidates in Congress are coming from. Most were not involved in negotiating the 2017 law, and many believe that reshaping America’s tax code will fight inequality for generations. The reality, however, is that the taxes Washington is considering raising will likely harm the middle class the most. A narrow-minded “higher taxes” approach won’t solve America’s spending issues or help us compete in the global economy of the future.

As the next Congress debates whether to maintain or raise the corporate tax rate, we face a critical decision. Lawmakers can either increase uncertainty by raising taxes or negotiate in good faith to build on the 2017 reforms. Allowing entrepreneurs to reinvest in their workforce will benefit the economy far more than higher taxes.

Politicians must remember that voters have a real choice in deciding who should pay taxes and how much. By reviewing data from the past six years, lawmakers should recognize the success of the 2017 tax policies. Maintaining the current tax rate and extending key provisions would deliver the greatest long-term benefits to the economy and the middle class.