The week prior to Christmas was an important one – not only in the world of politics, but for employers and workers across the nation. Congress passed a sweeping tax reform measure, the Tax Cuts & Jobs Act, that makes the first substantial changes to America’s tax code since 1986.
This is great news for our country in terms of our future prospects for economic growth. The soon-to-be-new law – which awaits the president’s signature – aims to simplify the Tax Code, making it easier to understand and comply with (which means less time that business owners have to take out of their day filing company taxes). Also included are provisions to lower the federal corporate tax rate to a far more competitive 21 percent and move to a territorial tax system so that businesses are only taxed on income earned within the U.S.’s borders, among other pro-growth changes.
These changes have been a long time coming. It’s hard to believe that 31 years had passed since any meaningful reforms had been made to what business leaders around the world had long called, onerous and uncompetitive tax code; and nearly unfathomable to conceive of the billions of dollars our economy must have lost out on over the decades to countries with better business climates.
With these tax reforms in place, it’s not only large businesses who will see economic opportunities skyrocket, but small ones too – all of which means more jobs, lower taxes and bigger paychecks for American families. This includes relief for small businesses who would benefit from a new, lower tax rate up to a certain level of their net business income and lower taxes on small business investment.
Right out of the gate, the U.S. Chamber championed the legislation due to the far-reaching positive implications it promised for our economy and America’s future competitiveness; and led a broad-based coalition of business advocates (including the PA Chamber) in supporting its passage in Congress. During the course of negotiations, our organization signed letters to federal lawmakers, and had this opinion editorial published in several news outlets statewide to make the case for long overdue federal tax reform. It’s been more than three decades since 1986 – and it was long past time for this great country to adopt the types of reforms that will now lead to the strong economy our hard-working population deserves.
You can learn more about how federal tax reform will impact Pennsylvania at www.TaxReformforAmerica.com.