It’s now been almost seven years since the Great Recession began—seven very long years. Even though the "experts" and the government say we are officially in recovery, that’s not what it feels like on Main Streets across Arkansas and across the country.
The sluggish growth the economy is currently mustering is not nearly good enough to drive true expansion and create the kind of full-time, well-paid jobs American and Arkansas workers need. To have a real, positive impact on economic growth, Congress must get to work on the big issues facing businesses and the economy, starting with meaningful tax reform.
I know first-hand how tough things are. My firm, Garver, depends heavily on a thriving economy for its own success. Without the right policies in place that foster a robust business climate, we simply cannot reach our full potential. And our story can be repeated with little change across the engineering industry, and many, if not most, other sectors as well.
Most people don’t know this, but U.S. companies pay one of the highest corporate tax rates in the industrialized world—that’s right, higher than France, Sweden, and many other countries Americans often associate with oppressively high taxes. As if this weren’t enough, our tax code is also so convoluted that nearly every business in the United States is forced to hire expensive consultants (CPAs, tax preparers, etc.) just to navigate it without running afoul of the IRS.
In fact, the Taxpayer Advocate Service, an independent organization within the IRS, recently estimated that "individuals and businesses spend about 6.1 billion hours a year complying with the filing requirements of the Internal Revenue Code" at an estimated cost of approximately $168 billion.
There is no question that all of this money—in too-high taxes and the administrative costs of our byzantine tax system—and all this time would be better spent on our companies and communities: expanding operations, hiring new workers, driving economic growth, and leading community service efforts. Real, comprehensive tax reform would lower the corporate tax rate, simplify the tax code, and rationalize who pays what kind of tax and why, helping create real momentum in the economy.
Recently, the Chairman of U.S. House Ways and Means Committee put forth a draft tax reform proposal to kick start this important effort. It’s not perfect—for example, I believe it could focus more on small-business growth—but it is a good start to a desperately needed conversation. The rest of Congress needs to take up this discussion with all due haste, craft legislation to make our tax code simpler and fairer, and get it passed - preferably before Election Day.
This is one of the major reasons I’ve joined the Arkansas Main Street Growth & Opportunity Coalition. Working with other business owners and leaders across the state, I will be working to convey the importance of comprehensive, business-focused tax reform to our Congressional delegation. Those willing to step up for Arkansas businesses will be remembered by me and my fellow business leaders come November.
We will also advocate for sensible reform on other important issues facing American companies, such as trade. Congress and the President need to work together to streamline the process by which trade deals are dealt with, so that we can quickly finalize such deals and open new markets to U.S. goods and services.
It’s been about 30 years since our last major tax overhaul. It’s past time for another one. U.S. businesses, especially small and mid-sized businesses, are desperate for pro-growth reforms that put the tax code to work for American companies, workers, and families. The time for political gamesmanship is over. Both parties in Washington need to come together to make tax reform a priority, and get the economy really growing again.
Dan Williams is the CEO of Garver, an engineering services firm with offices located throughout the South and Midwest and you can contact him at DHWilliams@garverusa.com