As chairman of the House Ways and Means Committee, I am excited about our opportunity to finally deliver comprehensive tax reform that will empower small businesses in Texas and across the country.
America’s small businesses embody the best of who we are as a nation and the promise of who we can be. They show that through grit and ingenuity, a simple idea can be transformed into a breakthrough product or service that improves countless lives.
As a Texan, I know how proud we are of our homegrown businesses. We celebrate the achievements of local companies which began small and are starting to make it big. Unfortunately, we’re now hearing fewer and fewer of these success stories. Our broken tax code is a major reason why. Because of significant tax and regulatory hurdles, it has become even harder for startups to survive, much less succeed.
The inhospitable business climate fostered by America’s broken tax code discourages entrepreneurs from putting their ideas into motion. Bold risk-takers who are considering starting a company may be forced to wait until conditions are more favorable, or even abandon the pursuit altogether. Businesses that are already up and running may have to stop hiring or making new investments until it’s safer to do so. Our economy stalls.
To empower Main Street job creators, we must free small businesses from the burdens of America’s broken tax code. In June, House Republicans released a blueprint for bold, pro-growth tax reform. With it, we have an opportunity to hit the ground running in 2017 on a historic tax overhaul that will get our economy moving again.
Our plan includes many provisions that will make it easier for people to start and grow their own small business. The reforms range from repealing the “death tax” — which is a major reason family-owned businesses are not passed down to the next generation — to innovative solutions that make the tax code dramatically simpler and fairer.
First, we end the practice of taxing small business income at individual rates as high as 44.6 percent. These earnings will instead be taxed at no more than 25 percent. This will help local businesses grow in good economic times and bad, offering them the freedom to keep more of what they earn so it can be used to serve more customers or hire new workers.
Next, we take bold action to unleash business investment. For the first time in history, businesses of all sizes will be able to fully and immediately write off purchases of equipment or technology needed to produce and compete at a higher level.
For startups with few extra dollars to spare, this means you can afford to buy cutting-edge software or machinery without having to forgo hiring more workers. For workers, it means new tools to help you do your job more efficiently. Greater productivity leads to higher wages.
Finally, our blueprint helps small businesses by busting up the Internal Revenue Service and redesigning it into an agency with a singular focus — service first.
Under our plan, the IRS will be centered on distinct service units trained to help different groups of taxpayers. One will focus explicitly on providing top-quality assistance to businesses. Main Street job creators will be treated the same way that they treat their own customers — with respect.
When President-elect Trump is in the White House, we will be closer to comprehensive tax reform than at any point the last 30 years. At the House Ways and Means Committee, we will seize this opportunity to deliver a 21st century tax code that offers local businesses a better opportunity to thrive.