By Guy Berkebile
As the 2018 election nears, Congressional Republicans are making progress on tax cuts "Phase 2.0."
Retiring U.S. House Speaker Paul Ryan, R-Wisc., and other Republican leaders plan to make the Tax Cuts and Jobs Act's temporary tax cuts, which are set to expire in 2025, permanent for individuals.
Guy Berkebile (Guy Chemical photo)
While they're at it, House Republicans should extend tax cuts for small businesses, which create the overwhelming majority of new jobs in our country.
America's 30 million small businesses employ roughly 60 million workers--half of the U.S. workforce. In fact, small businesses account for 99.9 percent of all American companies.
In Pennsylvania alone, there are one million small businesses, which employ 2.5 million workers. These employees depend on small business to provide career opportunities and financial security for their families.
They depend on small businesses like mine.
As the founder and president of Guy Chemical in Somerset, I have devoted my life to providing our community with good-paying manufacturing jobs. Specializing in silicone products and packaging for the consumer and industrial markets, Guy Chemical now has more than 160 employees on payroll, which is no small feat in rural Pennsylvania.
For years, the outdated federal tax code made it difficult to stay in business. I lost money for almost three years. I did not draw a salary from my business for five years. When I finally began drawing a salary, it was $36,000 a year.
To finance our growth, I mortgaged my house seven times. I took out four loans in 2008 alone.
Fortunately, the Tax Cuts and Jobs Act makes it easier to stay in business. Not only has the top federal rate dropped to 37 percent, but many small businesses will now qualify for the 20 percent standard deduction to lower their tax bill.
When we send less of our business income to the federal government, we have more left over to reward current employees and pursue expansion opportunities. When we can grow, we can provide more families with the financial security they need.
America's job creators are already doing so. To date, more than 540 U.S. employers have used their tax savings for pay raises, 401(k) increases, and bonuses--benefitting over four million working Americans.
Guy Chemical is one of them. I'm putting our tax savings to work by distributing bonuses and investing in expansion opportunities. We're now looking into opening a second manufacturing plant, which would bring even more jobs to rural Pennsylvania.
The small business community is understandably optimistic. Most small business owners claim business conditions are "good," with 60 percent expecting revenue to increase over the next year. So why not keep the momentum going?
The second round of federal tax cuts should build on the success of its predecessor, and drop rates even more. There is no surer way to help small businesses--and the people who depend on them--than to cut their costs.
From manufacturing firms like mine to local diners and bookstores, small business is the engine of our economy. Let's give that engine some more rocket fuel.
Guy Berkebile is the founder and president of Guy Chemical in Somerset, Pa. Readers may email him at guy@guychemical.com.