By Brian Cassidy
Whenever you turn on the news, politicians are using the new tax law to paint a picture of either gloom and doom or prosperity for middle-class workers. It’s time to cut through the partisan rhetoric. In my own experience as a small business owner, these tax cuts are going to work—and working Americans will benefit.
Just look at the history of taxation in our state as an example. Nevada is one of seven states that doesn’t levy an income tax, and it taxes business revenue at a top rate of just one-third of 1 percent. The contribution is small enough that businesses aren’t crippled by tax payments to the state and, with more businesses in operation Nevada, we can expect more revenue in sales taxes and aggregate business fees.
Low taxes and limited red tape have allowed Nevada’s economy to grow almost twice as fast as the U.S. average. It’s one of the reasons more than 450,000 Nevadans are employed by small businesses. And it’s evidence that the principles behind the Tax Cuts and Jobs Act work.
Despite operating out of a low-tax state like Nevada, successful small business owners were still forced to send upwards of 39 percent of their income to Washington under the old tax structure. These small businesses now pay 2 percent less, while the floor of our highest tax bracket is raised to $500,000 for individual small business owners and $600,000 for family businesses filing jointly. The country’s smallest firms, which are responsible for creating the majority of new jobs, also enjoy a new 20 percent deduction on their first $315,000 of family income. And they can now immediately expense their business expenditures and fully deduct the cost of interest on proprietary loans.
These provisions allow job creators to save money on a new oven, delivery vehicles or added storefronts the moment they buy them. Perhaps more importantly, small business owners are left with more resources for new hiring, wage increases and bonuses.
For my own business, an environmentally friendly debris, clutter and junk removal franchise in Reno, tax savings will translate to hiring more workers and investing in another truck to keep up with demand.
If there’s one thing I’ve learned since opening Junk King three years ago, it’s that success in my business is also indicative of the economic health of the Greater Reno area. When homes and commercial property are sold, or families and businesses decide to upgrade their spaces, they need junk removal services. Just as the 2018 tax cuts will allow me to invest in more employees and new equipment, they also give American families the leg up to finance the projects they had once put off under harder economic times.
This is the real outcome of tax cuts for Main Street America: Greater employment and local spending. When businesses are strong, our communities are better for it. The Tax Cuts and Jobs Act will give Nevada’s small businesses the federal tax relief they need to expand, creating a strong economy for years to come. Even when half of our politicians aren’t willing to admit it, knowing how this tax cut helps my own business makes me confident in saying tax cuts work.
Brian Cassidy is the owner of Junk King in Reno, Nevada.
From the Editor