Joe Sanfelippo: Tax cuts have small businesses booming
This month, the Labor Department announced the national unemployment rate remained at 3.9 percent. And last month, the Commerce Department announced the economy is growing at 4.2 percent. This is the first time since the year 2000 that the unemployment rate has been below 4 percent and economic growth above it.
For ordinary people in Wisconsin this means more opportunity at higher wages. The jobs report also indicated that black and Hispanic unemployment rates are at all-time lows. And female and youth unemployment rates are touching lows not seen in half a century. Wages are rising at their fastest pace in a decade.
Millennials and people with short memories seem to be taking this economic strength for granted. This is demonstrated by their lack of appreciation — or outright disdain — for pro-growth policies. A recent Gallup poll finds that most millennials would prefer to live in a socialist economy over a capitalist one. But socialist economies don’t grow — they only divide up the pieces of the economic pie.
As a small business owner in Wisconsin, I’ve seen how the new tax cuts have strengthened the small business spine of the American economy.
Though it’s received little media coverage, the tax cuts created a new 20 percent deduction for American small businesses thanks in large part to Wisconsin’s very own U.S. Sen. Ron Johnson, R-Oshkosh. That means small businesses can protect one-fifth of our earnings from taxation. This new money can be spent on business operations including expansion, hiring and employee bonuses. Like many small business owners across the country, I’m using these tax savings to invest in new equipment and give raises.
When you consider 30 million other small businesses in the country are making similar investments, our economic growth and low unemployment makes sense.
Small businesses are also benefiting from tax provisions that allow them to immediately expense all business expansion. Ending complicated depreciation timelines is a major incentive to expand.
The individual tax cuts are also putting more money in the pockets of our customers. Provisions like a doubled standard deduction, doubled child tax credit and lower tax rates across the board are saving families thousands of dollars a year. This money stays in our communities, not the bloated federal budget.
It’s clear why small business and consumer confidence indices are touching all-time highs.
Yet good public policy will only continue if people know about it. Democrats are promising to repeal tax cuts if they retake Congress this fall. That would be devastating to small businesses, family budgets and Main Streets.
Critics claim these tax cuts are only for the rich, but that’s a false narrative. In fact, the 20 percent deduction is off limits entirely for white collar businesses earning more than $315,000. Other major tax cut provisions, like the doubled child tax credit, are also off limits for the wealthy.
Voters should educate themselves on the real effects of the tax cuts before casting their ballot. Otherwise, it may be another generation before we hit 4 percent economic growth and unemployment again.