As Tax Day 2019 swiftly approaches, numerous entrepreneurs are seeing new benefits from the Tax Cuts & Jobs Act, enabling them to grow their ventures and hire additional staff.
I recently co-hosted the White House Manufacturing Roundtable at which about 20 small business owners discussed the resurgence of manufacturing in the chemical, construction, consumer goods, electrical, metallurgical and technology industries. They shared stories of how they leveraged the tax cuts to invest in their companies and offer higher wages, bonuses or both to their employees. With what they were saving in taxes, firm after firm detailed new types of equipment that they were able to purchase or investments they were able to make to expand their footprint.
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Never before have I seen the genuine optimism about entrepreneurship and the American economy that was evident at the roundtable. There were two clear conclusions: small businesses are flourishing and creating jobs while employees are receiving larger paychecks.
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National research supports the stories I heard. Yahoo! Finance reported that American workers appear to be getting bigger paychecks even though they were working the same number of hours. Fox Business found that average hourly wages rose a better-than-expected 3.4 percent over the previous year, a rate of increase not seen in a decade.
These experiences reflect our nation’s continuing economic boom. March was the 101st consecutive month of positive job growth. This is the longest sustained period of economic growth since World War II. For the first time, there are more job openings than people looking for work.
A decade ago, unemployment rates were soaring, according to U.S. Bureau of Labor Statistics. In the Buffalo-Niagara Falls area, for example, the unemployment rate was 8.3 percent rate; today it is 3.9 percent. Newark posted a 12.7 percent unemployment rate in 2009; today it’s 6.3%. Puerto Rico’s unemployment rate hit a staggering 15 percent; thanks to record investment since hurricanes Maria and Irma and the Administration’s creation of Opportunity Zones on the island, unemployment is now 8.5 percent and falling.
As job creation soars and wages continue to grow, our nation’s economy is benefitting all Americans – especially those in small business.
As Tax Day approaches, many entrepreneurs who operate several types of small businesses, such as sole proprietorships, S corporations, and partnerships, may qualify for a 20% income deduction. Since the business income “passes through” to the individual business owner’s income for tax purposes, the tax reform allows these individuals to deduct 20% from their total income.
As Ben Franklin famously wrote in 1789, “in this world nothing can be said to be certain, except death and taxes.” But thankfully, 230 years later, tax reform makes one half of that premise less agonizing.
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ABOUT THE U.S. SMALL BUSINESS ADMINISTRATION & SBA ATLANTIC REGION (Region II)
The U.S. Small Business Administration makes the American dream of business ownership a reality for millions of Americans. As the only go-to resource and voice for small business backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. The SBA delivers services through an extensive network of field offices, located throughout ten different regions of the country. The Atlantic Region (Region II) services the States of New York and New Jersey as well as Puerto Rico and the U.S. Virgin Islands. It is led by Regional Administrator Steve Bulger.
