Lock in Tax Cuts, Stimulate Virginia Small Business

Gary Desilets

by Gary Desilets

Ahead of the November midterms, Republicans are preparing to make President Trump’s tax relief permanent.

House Republicans have introduced legislation to lock in tax cuts beyond 2025, when they are currently set to expire. The legislation also would maintain the standard deduction, which increased to $12,000 per individual and $24,000 for a married couple, and keep the special deduction for pass-through small business owners. (Pass-through business owners are taxed at their individual marginal rates, thereby “passing” business income on to personal income.)

In the words of House Ways and Means Committee Chairman Kevin Brady (R-TX): “This legislation is our commitment to the American worker to ensure our tax code remains the most competitive in the world.”

He’s spot-on. Small businesses need permanent tax relief, which will make it much, much easier for them to grow the U.S. economy.

Our economy depends on small business. America is home to more than 30 million small businesses, which employ nearly 60 million workers—half of the U.S. workforce. In fact, small business accounts for 99.9 percent of all American businesses.

This story can also be told in Virginia, which is home to just under 724,000 small businesses. Many of them our exporters who connect Virginia to other states and foreign economies. In our state, 1.5 million employees—47 percent of the Virginia workforce—depend on small business for their current employment and financial stability.

We need to support these job creators with pro-business policies, which President Trump and Republicans in Congress have prioritized for months. Tax cuts, for example, allow employers to keep more of their hard-earned money, making it easier to invest that money in hiring, pay raises, and other ventures.
That’s exactly what the federal tax bill accomplished. By decreasing rates and increasing deductions, elected officials finally extended an olive branch to the business community, giving job creators the shot in the arm they need to finance expansion.

As a small business owner, I’ve seen it firsthand. I own Deckscapes of Virginia, a deck builder in Catharpin. Because of my tax savings, I was able to hire additional workers and expand our business operations. Moreover, we opened individual retirement accounts (IRAs) for all of our employees, helping them prepare for life after work. That’s how tax cuts work: More money in my pocket eventually means more money in the pockets of my employees.

I’m not alone. Countless businesses across Virginia have used their tax savings for the greater good. Take Newport News-based Bay Electric, which not only hired 12 electricians and two project managers, but also invested more than $500,000 in new trucks and additional equipment. Or consider Fredericksburg-based Payne Trucking, which dished out $750 bonuses to boost Payne employees’ financial well-being.

Let’s build on this positive momentum. There’s no reason not to make federal tax cuts permanent, on behalf of employers and employees.

That’s exactly what Republicans should do. Forget politics for a second. Do the right thing for the U.S. economy.

Gary Desilets is the owner of Deckscapes of Virginia in Catharpin.

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13 responses to “Lock in Tax Cuts, Stimulate Virginia Small Business

  1. Every story I read about this seems to leave out that other inconvenient body of Congress, the U.S. Senate. Absent some sign from the less numerous body I don’t see this getting very far until after the election, which of course could really change the landscape and stop this cold. But ’tis election season, so I’m sure the House will vote the way he wants. I remain more focused on the response at the state level…

  2. The tax cuts for business are good policy, and already permanent. The tax cuts for individuals at the top income levels are not good policy. IMO, in the current political environment there’s no way they are going to be made permanent, unless it’s by Republicans who are blind to, or don’t care about, the public reaction — because they are already resigned to losing Congress immediately thereafter.

  3. I hate to see any discussion of tax reduction (or permanent tax reduction) without any mention of deficit impact. It is a generalization, but Republicans care most about cutting taxes and Democrats want to keep spending high in their focus areas. You don’t have to be a noted economist to see where this combination leads.

  4. Well.. there used to be something called the Balanced Budget Amendment that the GOP would pummel the Dems over – with good reason. Even when the economy had cratered over the Banking/Mortgage crisis – the GOP voted against “stimulus” because it increase the deficit and debt…

    Like Acbar, I support cutting taxes for small businesses but I’d also note that the biggest drag on small businesses is the tremendous cost of trying to provide health insurance to their employees.. and many just cannot do it. They are up against bigger competitors that can including every other industrialized country where small businesses thrive because health care is not a direct cost to the business. The advent of Obamacare and the MedicAid expansion will do as much or more for small business than this bogus mantra about cutting taxes – which is mostly trickle-down economics that believes that wealthy people will invest in companies that hire people (supply side) in the belief that if you hire them to make widgets that the “market” will respond by buying those widgets. Indiscriminate tax cuts combined with Supply Side economics – and zero regard for deficit and debt… that’s NOT how you do the “right thing” for the economy except in the Alice in Wonderland economic world of the GOP these days.

    You want to help small businesses and the economy? Give people easy access to post-high school education and health care – and get off the “tax cuts for all” foolishness…

    • Larry – we spend more money on education than most other countries. Yet a significant number of people are functionally illiterate. I don’t see the receiving part of society living up to its part of the social contract. If I have a duty to pay taxes to fund schools and I do, I expect those attending school to take full advantage of public schools. But a helluva lot of people don’t. And now we want to expand free education to post-high school. Let’s just gather a few billion dollars, put it in a pile and burn it. That will add to the competitiveness of small business just as much as expanding free education beyond high school.

      We don’t have enough responsible behavior in the country to warrant more expenditures. And we don’t have enough controls on the public sector’s provision of services. Like I’ve written before: If the government cannot stop dumping raw ^&*( into the Potomac River, why should anyone expect it to be able to address climate change? If the government cannot turn out high school graduates who have mastered the courses, why should we trust it to operate free post-high school programs?

      • @TMT – all kinds of nuances to taxes and what the taxes pay for and whether it is “enough” or not.

        But using your own analogy… We pay VDOT BILLIONS of dollars a year and we STILL have really bad congestion.

        Following your reasoning.. does it follow that because VDOT has “failed” to fix congestion that we should cut gas taxes and give them back to taxpayers cuz VDOT is wasting them?

        • Larry – I’m not advocating cutting the amount of money spent on education. I’m opposing spending a awful lot more money to expand free education to beyond high school because we don’t do a good job at that. Let’s have better accountability in our K-12 system. Let’s put pressure on low-income parents to push their kids harder.

          My grandmother, with a 10th grade education, living on $68 a month from my late grandfather’s WW1 pension made sure all four of her sons went to school. Let’s give the taxpayers some value for what we spend now before we launch a new expensive program that isn’t likely to produce better results based on what we see from K-12 today.

  5. TMT EXCELLENT synopsis.

  6. Our issue with education in this country is this.

    If we remove the test scores of all kids on free and reduced lunches – the
    remaining set of kids score among the highest in the world.

    Our problem is generational poverty perpetuated by the way we site neighborhood schools. The schools that serve low income neighborhoods typically do badly. You read it here in BR all the time.

    Even in places like Fairfax County – there are schools in low income neighborhoods that do poorly and pull down the scores for the other schools.

  7. “If we remove the test scores of all kids on free and reduced lunches – the remaining set of kids score among the highest in the world.”

    What, Larry, no poor people in China, India or even Western Europe? Don’t they get to deduct their economically-challenged from their test scores, too? Something else is going on here, something much deeper. And there are also schools in economically challenged areas that do very well, and many many individual students in poor families who excel. No, just blaming it on poverty and hoping to solve it by raising incomes or providing more benefits will not do.

  8. That’s a fair point Steve – but the claim is that they have many fewer chronically poor – that the Govt supports the poor better and they are not
    relegated to low-income neighborhoods that is in some respects de-facto “projects”.

    Housing stock and neighborhoods are much less separated by income demographics than here where you know yourself and have commented on white fight to the suburbs – leaving behind the poor and their kids with schools staffed by only those who cannot find a better paying less demanding teaching position elsewhere.

    And take a place like Henrico – where it is ONE monolithic school system with dramatically different individual school scores with some of the best scoring schools in Va AND in the very same system some of the worst scoring schools.

    How does this happen when it’s the same administrators running all those schools in their system and end up with such disparate results?

    I’ll leave you with this and I can supply many more – the trick is to get your search terms calibrated… then you do get good discussions of why we have such a disparate education system whereas Europe and Asia (OECD) much less so.

    https://www.theatlantic.com/education/archive/2016/02/us-asia-education-differences/471564/

    the bigger point is that this is something that we CAN reform/make better – I’ll not say “FIX” but I part company with those who say it is race or genes or even bad/expensive public schools. They have public schools and poor in all those countries that beat us also!

    Just once I’d like to see a rational and intelligent conversation about this issue take place in BR rather than the demonization of race and public education.

  9. According to the Bureau of Labor Statistics, as reported by CNS, “Americans on average spent more on taxes than on food and clothing combined in 2017, according to the Bureau of Labor Statistic’s new data on consumer expenditures, which was released this month.” That’s absolutely disgusting.

    https://www.cnsnews.com/news/article/terence-p-jeffrey/bls-americans-spent-more-taxes-food-clothing-combined-2017 Contains a link to the BLS website.

    The first and drastic cuts should be made to any program or appropriation that is related to crony capitalism.

  10. Is it Deckspaces or Deckscapes of Virginia? above article mentions both spellings. Our deck is by Deckscapes.

    Anyways I agree small business needs must be considered. But I know, having worked for a big company, and having met with a federal legislator’s staff, that pretty much every sentence Congress writes has the idea to carve out safe operating space for small business, to prevent big business from “rolling over on their sleep” and squashing them. So I trust that emphasis will continue.

    Where I maybe see a problem, is the Virginia taxes, especially in NoVa.

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