Guest AuthorServing as Indian River Country Tax Collector while also owning a small family business, I have a unique perspective on taxes. I collect them and pay them, both as an individual and as a business owner. And I see the direct impact taxes have on businesses and the economy. As both a tax official and a small-business owner, I believe federal tax reform is essential to the economy, in Florida and the nation as a whole.
Right now, the United States has the highest corporate tax rate in the developed world – higher than France and Sweden. This puts our businesses of all sizes at a distinct disadvantage when trying to win business in the global marketplace.
Because our products carry a much higher tax burden than those from most of our primary economic rivals and competitors, they are more expensive, and therefore less attractive to consumers. Congress needs to lower the business tax rate to a competitive 25 percent, so that all U.S. firms – including small businesses – can compete on a level playing field with international rivals.
Not only are our taxes high, they are also so complex that nearly every business has to devote significant resources to hire professionals to get them properly filed. Given the severity of the penalties if we make a mistake, and because of our gargantuan tax code, spending this money every year is effectively a built-in cost of doing business in the United States.
Small businesses feel these costs more than their larger competitors: tax compliance costs can be as much as 67 percent higher for small businesses than big corporations – and small businesses are far less likely to be able to easily afford such costs. All this money would be much better spent on developing new products, offering new services, hiring or training employees and expanding operations.
For small businesses, tax reform is not some kind of theoretical issue. It is a top priority that – if realized in the right way – would have an immediate, positive impact on not only our businesses, but on our employees, communities and the larger economy as well.
To be the “right” kind of tax reform, it must significantly simplify the tax code, be broad enough to help all businesses and be permanent so that business owners can make mid- and long-term business decisions with confidence. Tax reform must also lower the current corporate business tax rate to a much more competitive 25 percent, as noted, so that our businesses have a fighting chance in the global market.
Getting positive tax reform done in the current political environment will not be easy. But it is necessary. Failure to implement meaningful and comprehensive reforms means a failure to help small business grow and succeed. But with tax reform, we can help our businesses and our economy prosper.
Carole Jean Jordan currently serves as Tax Collector for Indian River County. She also owns a small business and is a former Chair of the Republican Party of Florida. Column courtesy of Context Florida.
