It was just a few weeks after we had met at a roundtable for local hotel owners in southwest Ohio, when I received her note in the mail.
“Thank you for tax cuts” was written at the top. The note went on to say: “For decades, small business owners — like myself — have struggled to make ends meet partially due to the high taxes imposed on us by the federal government. But now that’s beginning to change. Over the past year, job creation ramped up, the unemployment rate dropped to the lowest level of the century, wages are beginning to rise and small business optimism is near an all-time high. That’s what I call results.”
This is just one voice in Cincinnati’s small business community, but it is a refrain that is echoing across the country. The MetLife & U.S. Chamber of Commerce Small Business Index recently reported that small business confidence in the national economy is at the second highest rating in the history of the Index. The National Federation of Independent Business (NFIB) also reported that small business optimism rose “to its highest level in more than 30 years” this May, according to CNBC.
A large part of this is due to the Tax Cuts and Jobs Act, which President Trump signed into law last December. Since then, one million jobs have been created and, for the first time since 2000, there are more job openings than people who are unemployed.
These common sense, pro-growth policies have translated into real results for our small business community. As NFIB President and CEO Juanita Duggan said. “Small business owners continue to report astounding optimism as they celebrate strong sales, the creation of jobs, and more profits. The first six months of the year have been very good to small business thanks to tax cuts, regulatory reform, and policies that help them grow.”
With some of the enormous weight of an outdated tax code lifted from their shoulders, small businesses are able to spend more of their time planning for growth and success. They are better able to invest in the innovation and invention that push scientific and technological progress for our country and for the world. It’s no wonder they have a more optimistic outlook on the future.
And there’s more good news on the horizon. Kevin Brady, Chairman of the Ways and Means Committee where I serve, just released our framework for a “Tax Reform 2.0,” which would make the recent tax cuts for individuals and small businesses permanent.
But what does this mean for the rest of America? It means a lot, it turns out.
That’s because small businesses are where you find both the engine that powers our national economy from the ground up and the heartbeat of America. Together, they generate billions annually. They drive invention and innovation, creating 16 times more patents than larger firms, according to the U.S. Small Business Administration (SBA). They spur job creation, accounting for over 40 percent of private sector hiring, according to the SBA. They’re both the backbone of and a barometer for the overall health of our economy.
When they thrive, it translates into growth and opportunity for the communities around them. It is more “We’re Hiring!” signs and less “Going Out of Business” sales. It means new positions and more career growth for Ohio workers. In fact, over half of small businesses have reported plans to boost hiring, thanks to the lower tax rates. Already, 90 percent of wage earners at companies of all shapes and sizes have reported higher take-home pay, according to Americans for Tax Reform.
An environment where small businesses thrive also means more hope: difficult to quantify but deeply important. Think about it: nearly every small business is the tangible manifestation of somebody’s dream — whether that is to revolutionize an industry, offer a valuable service to their neighbor, or simply provide a better future for their kids. Hope in the opportunity to turn those ideas into realities is what we call the American Dream and what has driven so much of the progress and prosperity in our country. Today’s renewed optimism on the part of America’s dreamers and doers doesn’t just mean a reenergized outlook for our country — but also the creation of real opportunities for more and more of our fellow citizens.
And that’s a good thing!
Congressman Wenstrup (R-OH) represents Ohio’s Second Congressional District in the House of Representatives. He is a Member of the House Committee on Ways and Means and the House Permanent Select Committee on Intelligence.