Here in Virginia, we are blessed with a relatively strong economy. But we all know it could be so much stronger. At the Hampton Roads Chamber, we bring together and develop leaders in the business community, and give them an environment where ideas can be discussed and transformed into practical solutions that produce positive economic results throughout southeast Virginia.
In order to get Virginia’s economy back to robust, sustainable growth, we need leaders in Washington, D.C., to do the same – transform their ideas on federal tax reform into practical solutions that produce results for all of Virginia’s diverse communities. And we need them to do it this year.
As someone with broad experience in government and civic engagement at all levels, I know how long it can take the cogs of the legislative process to begin moving, gain momentum, and attain a goal.
While I’m glad to see pro-growth tax reform discussions beginning in earnest in Congress and the White House, I’m also concerned by reports that passage of a comprehensive tax reform package may be delayed until next year, or even beyond. This is an unacceptable option for Virginia’s small businesses and working families.
The U.S. tax code hasn’t been updated since Ronald Reagan was president. In the 30 years since, the world, our society and our economy have changed dramatically. From widespread computing and electronic communications to the internet, smart phones and new trade patterns, our world is more interconnected today than it has ever been before.
But unlike most of our major commercial rivals, the United States hasn’t modernized its tax code to meet and match the needs of the 21st century. It is vital that we do so in 2017.
Today, the United States has the highest corporate tax rate among members of the Organization for Economic Cooperation and Development nations – the industrialized world. When businesses in France and Sweden pay lower taxes than American companies, something has gone very wrong.
Because of our high corporate tax rate, our companies cannot compete equitably in the global marketplace, creating a significant drag on our economy. This isn’t just a problem for big corporations – in the “flat” world of today, even local small businesses have to compete with international rivals.
At the same time, the federal tax code is a disaster. Its tens of thousands of pages of incomprehensible jargon strike fear into the hearts of all business owners. It’s so complicated, just about all businesses are forced to hire expensive tax preparation professionals to properly file their taxes and avoid onerous penalties from the IRS.
However, big corporations have the resources to not only navigate this mess, but also to leverage the many loopholes that are built into the current tax code to drive their effective tax rate down, giving them an unfair advantage over small businesses even while facing an unfair advantage from their rivals overseas.
It’s time for Congress to push ahead with tax reform and deliver the relief our job creators need to get back to the business of growing our economy, and increasing employment and wages.
I hope Congress and the White House take a pro-growth approach that lowers the corporate tax rate, simplifies the tax code, and gets rid of unfair and unnecessary loopholes. Now it’s time to get such a plan finalized, passed and signed into law.
Bryan K. Stephens is the president and CEO of the Hampton Roads Chamber.