President Donald Trump is on the verge of wrapping up his campaign to cut taxes. Here in North Dakota, we need all the tax relief we can get. That’s why the president chose our state to help kick off his plan.
Pledging “the greatest tax reduction in the history of our country, greater than ever before,” Trump urged Congress to cut small businesses taxes by nearly half—hands down, the best way to deliver the growth North Dakotans need.
Consider this: Almost 60 percent of North Dakota employees work for one of our small businesses, which make up just shy of 99 percent of all businesses in state. But as recent data from the U.S. Small Business Administration shows, last year, we struggled with economic contraction and higher unemployment.
Put two and two together, and it’s clear that we need a quick, powerful turnaround.
Right now, small businesses pay tax rates that often exceed 40 percent when state and local taxes are factored in. That’s too great a burden even in good times. In challenging ones, it doesn’t just keep small businesses down, but also the local communities depending on them. The way to help states like ours get back in gear is to slash the small business tax rate down to 25 percent, as President Trump advocates.
[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#ffffff” txt_color=”#000000″]Right now, small businesses pay tax rates that often exceed 40 percent when state and local taxes are factored in. That’s too great a burden even in good times.[/mks_pullquote]
There’s no question that our small business owners—like those across the country—deserve a tax cut as large as the president’s vision. Our outdated and unfair federal tax code treats most small businesses as what the IRS calls “pass-through” entities, or what I call main street small businesses. That means the highest individual rate is applied to a small business. Just like that, nearly half the revenue of a small business, which could stay in local neighborhoods and help troubled states, passes right on through to Washington.
Americans know it’s time for a change. Polls show majorities of voters want tax relief that creates good jobs and keeps them at home, and majorities of small business owners want to do just that—re-investing their business income back into higher paychecks, increased employment, and expanded facilities.
Americans also know tax relief is the kind of issue that enjoys bipartisan support. Over half of respondents support a tax overhaul. A large majority of Republicans—two thirds—say their taxes are too high, and an even bigger majority of Democrats—70 percent—say tax relief that boosts jobs and the economy should be a priority for lawmakers in both major parties.
We need Sens. John Hoeven (R-ND) and Heidi Heitkamp (D-ND)—our former tax commissioner—to help pass the kind of tax cuts that help the middle class. To bring back economic strength and security to Main Street, we’re counting on Congress to lift the burden of those excessive pass-through taxes from the small businesses that drive our productivity.
With the make-or-break holiday shopping season coming, there’s no time to waste. The legislative calendar is almost over. As Sen. Hoeven recently told a roundtable meeting with state small business owners, including farmers and ranchers, Congress is in the home stretch on tax negotiations, and could pass a bill bringing needed tax relief as soon as this month.
The sooner lawmakers can help our job creators, the better.