The House Ways and Means Tax Policy Subcommittee heard from small business owners in a May 23 hearing on tax reform and small businesses. The hearing was the second in a series planned to examine certain effects of the Tax Cuts and Jobs Act (TCJA) (P.L. 115-97).
Generally, Republicans and Democrats remained divided in their views of the TCJA. Republicans praised the new law for creating jobs and spurring economic growth, while Democrats criticized the legislation for primarily benefiting the wealthy and not doing enough for small businesses.
“The National Federation for Independent Business reported small business profit growth at a 45-year high,” subcommittee Chairman Vern Buchanan, R-Fla., said during opening statements. “The percentage of small businesses that are expanding their employment is at its highest level since 1999,” he added.
However, ranking member Lloyd Doggett, D-Tex., criticized the TCJA for primarily benefiting multinational corporations and failing to help small businesses. According to Doggett, the new tax law provides a windfall for Wall Street banks and for multinationals; small businesses were basically an afterthought.
Generally, four of the five witnesses testifying before the subcommittee praised the TCJA for benefiting small businesses. Each of the four witnesses are small business owners. “The business provisions of the TCJA say America is investing in small business,” Larry Gray, owner, Alfermann Gray & Co. CPAs, LLC, said.
Likewise, Philip Homan, President and CEO of LORAM Maintenance of Way, Inc., praised the TCJA for spurring U.S. investment. “Reducing the U.S. corporate tax rate to 21% and eliminating U.S. tax incurred when future foreign earnings are repatriated will dramatically encourage new U.S. investment. This is not just a benefit for very large multinational corporations,” Homan said.
However, John Arensmeyer, CEO of the advocacy organization Small Business Majority, criticized the TCJA for primarily benefiting the wealthy and large corporations. “The real winners of the new tax law are large corporations and wealthy individuals, not Main Street small businesses,” Arensmeyer said. Further, he went on to criticize the TCJA for failing to level the playing field. “Our polling found 85% of small businesses want large corporations and wealthy Americans to pay their fair share of taxes.”
By Jessica Jeane, Wolters Kluwer News Staff
Hearing testimony can be found at https://waysandmeans.house.gov/event/hearing-on-tax-reform-and-small-businesses-growing-our-economy-and-creating-jobs/