Tax Reform: An Opportunity for Growth and Success for California’s Small Businesses
Fox & Hounds
By: Michael Vallante
This year, there is a reason to celebrate on April 17th: the simpler, fairer, tax system is making a real difference for families and businesses. As a result of the Tax Reform Act passed last year by Congress, Americans are more optimistic about the economy than they’ve been in a long time. On Main Streets across California, small businesses are feeling confident again.
Although less than five months old, the Tax Reform Act is helping individuals and families around the country, and already creating a positive impact on business. There are nearly 30 million small businesses in the United States, employing 57.9 million American workers. Because of tax reform, more than 99 percent of these small businesses will face the lowest top marginal tax rate in over 80 years.
Small businesses which create two out of every three new jobs in this country are the engine of our economy and the heart of communities. Tax reform will increase investment in the American economy and in U.S. workers, which leads to higher growth, higher wages, and more jobs. A 3 to 5 percent increase in GDP growth over 10 years, as the President’s Council of Economic Advisers predicts, could represent as much as $1.2 trillion in economic output.
Because of the changes in tax code, large California companies including Apple, Amgen, Charles Schwab, Disney, and Bank of the West have provided bonuses to their employees. Tax savings are allowing them to hire more employees, increase wages, and plan on investing in capital expenditures.
Smaller businesses around the Golden State are also benefiting from tax reform. Mission Produce in Oxnard and Pod Cast One in Los Angeles both provided $1,000 bonuses for employees. Employees at T.J. Maxx stores across California received bonuses, plus the company is instituting paid parental leave and increasing contributions to retirement plans because of tax savings. From Sacramento to San Diego, California’s business owners are making unprecedented investments in their employees and companies because of the Tax Reform Act.
The SBA sees other signs that entrepreneurs are betting on success in 2018 and beyond. The number and dollar value of all SBA guaranteed loans are up around the country compared to the first half of last fiscal year. Of particular note is the more than $2.1 billion in SBA guarantees the last six months for 504 loans which help small business owners finance big ticket purchases like equipment and commercial real estate. These are the kind of substantial, long term business investments that entrepreneurs only make when they’re feeling bullish. Increased small business confidence means companies are finally buying what they need to grow, which creates more jobs for the economy.
The Small Business Administration salutes America’s small business owners for responding to historic tax reform by investing into their companies, and putting their employees first. Since 1953, the SBA has helped small businesses start up and scale up with loans, counseling, and contracting assistance. Our programs are helping entrepreneurs make the most of the growth opportunities provided by the historic tax reform, and for the first time in years, there is a reason to celebrate on April 17th. The simpler, fairer tax system is helping make a real difference for California’s families, and giving small businesses historic opportunities for growth and success in 2018, and beyond.
A former entrepreneur, Michael Vallante lives in Pasadena, and serves as the Small Business Administration’s Regional Administrator for California, Nevada, Arizona, Hawaii, Guam, and American Samoa. For more information on SBA programs, visit www.sba.gov .