As we near the end of President Donald Trump’s first 100 days and the opening salvo of the 119th Congress, Congress has worked swiftly to avoid a shutdown and deliver on many of the top priorities of the American electorate.
Even with all the progress made in such a short amount of time, one big priority is still outstanding: the pressing economic concerns of millions of American small business owners regarding taxes.
Recovering from the Biden era’s disastrous inflationary policies and strengthening our national economy remain top priorities for most Americans, as well as the more than 33 million small businesses across the country.
Certainly, the path to economic recovery includes a comprehensive plan that seriously addresses persistent challenges that have plagued our nation, particularly for the last four years. They include high inflation and rising costs on many consumer goods, regulatory uncertainty for businesses, a crippling national debt, and growth-killing taxes for job creators.
America’s Golden Age is on the horizon, but only if Congress works in a bipartisan manner with the executive to outrun the dark cloud that has been hanging over Americans’ future for the past several years. Much-needed structural changes, such as rebalancing certain trade agreements and improving government efficiency, may result in short-term, temporary economic contractions. However, focusing first and foremost on tax relief in the form of tax cuts extension will help the country ride out any short-term market volatility and incentivize reinvestment in American businesses and workers here at home.
More importantly, while providing regulatory certainty goes hand in hand with fiscal relief, the extension of the 2017 Tax Cuts and Jobs Act (TCJA) continues to be the most urgent at this juncture, especially given that many of the TCJA tax cuts and provisions are set to expire at the end of this year. Thankfully, House Republicans have skillfully leveraged their control of the chamber to enact a skeleton budget proposal that would allow them to extend the TCJA provisions. President Trump recognizes this and did not miss the opportunity to highlight this priority during his recent address before Congress, calling on lawmakers to extend and expand the law.
During the first Trump administration, I served as Associate Administrator for the U.S. Small Business Administration’s (SBA) Office of Entrepreneurial Development. During my tenure, I witnessed President Trump’s commitment to helping small business owners from all walks of life succeed by promoting education, mentorship, and public policies that foster economic growth. This included tax relief. Minority business owners, including those in my own community, experienced growth like never before.
In fact, over the past seven years, Hispanic and other minority business owners have benefitted immensely precisely because of the inclusion of various provisions in the TCJA – such as the Child Tax Credit, the Research & Development Credit, the Small Business Deduction – affording business owners the ability to expense equipment, and more. These provisions have helped U.S. Hispanic business owners and entrepreneurs to continue investing in themselves, diversify their operations, and contribute to stronger local communities and economies.
Additionally, by reducing the corporate income tax rate from 35 percent to 21 percent, the TCJA has helped make all U.S. businesses more competitive, particularly with their global counterparts. The corporate tax reduction also incentivized many small businesses to restructure themselves as C-corps, taking advantage of lower rates. In fact, despite the perception that C-corps are exclusively suited for big businesses, the bulk of these are actually smaller enterprises, with roughly 85 percent of C-corps employing fewer than 20 workers.
Reducing the tax burden on small businesses via the TCJA clearly helped bring down unemployment rates to historic lows and catalyze job creation and wage growth, benefitting an untold number of American workers and families. TCJA was likely the single-most popular and consequential piece of legislation passed during the first Trump Administration. The TCJA’s various tax provisions, credits, and incentives helped energize the American economy when we needed it most, and helped our country hold steady during COVID and the Biden administration’s inflationary years.
TCJA’s positive impact on minority- and Hispanic-owned businesses is particularly important to me, not just as a former SBA official but also as the former National Executive Director of The Latino Coalition and former COO for the U.S. Hispanic Chamber of Commerce. U.S. Hispanic- and Latino-owned businesses are an increasingly powerful force in the American economy—accounting for 36 percent of new businesses launched in 2023. It is vital we help preserve this pro-business environment by ensuring President Trump’s original tax cuts are extended and remain during his second term, and ensure we keep powering this tremendous growth and success and usher the President’s vision – America’s Golden Age. Congress must now act.