Congress needs to cut taxes and create jobs now

Things are moving fast in Washington. Notably, Congress is taking advantage of the budget reconciliation process to advance a policy agenda that could—if done right—supercharge the small business community in Pennsylvania. To help Main Street, lawmakers should prioritize making the Tax Cuts and Jobs Act permanent as well as eliminating silly Biden-era regulations.

As Donald Trump would say, it can all be done in “one big beautiful bill.”

Following its initial passage in 2017, the Tax Cuts and Jobs Act acted as rocket fuel for America’s small business community. The law cut taxes for entrepreneurs, which allowed them to reinvest hard earned revenue into creating jobs, boosting staff wages, and expanding operations.

My business, which employs more than 150 people, is a prime example. Armed with savings from the tax cuts, we were able to build a new laboratory, invest in new chemical compounding equipment, and purchase updated packaging lines. On the human capital front, employees enjoyed higher bonuses, a new 401(k) program, and dozens of new colleagues.

With the right policies in place, this type of success can continue and be replicated with even more businesses having the opportunity to expand and grow like mine did. But for that to happen, lawmakers have to act before the tax cuts expire at the end of the year. What specific measures should policymakers be considering?

For one, the budget reconciliation package should include the same lower tax rates for pass-through small businesses—which represent a majority of Main Street operations—that were agreed to in 2017. Two, the bill should extend and expand upon the small business tax deduction—increasing it from 20 percent to 25 percent of qualified income. And three, the legislation should include immediate expensing every year for capital investments, such as new equipment or facility upgrades.

What’s the biggest hurdle to these tax cuts getting over the finish line? Politicians wrongly crying fiscal irresponsibility.

If history is any indication, cutting taxes actually corresponds with an increase in federal revenue because quickened economic growth more than makes up for lower rates. In fact, inflation-adjusted tax revenues have significantly grown rather than fallen since passage of the tax cuts in 2017. Internal Revenue Service (IRS) collections are up more than $1.5 trillion annually. President John F. Kennedy put it well in 1963 when he said, “Reducing taxes is the best way open to us to increase revenues.”

In addition to cutting taxes, Trump and his allies in Congress also have an opportunity to continue walking back harmful Biden-era policy actions. The White House has already accomplished a lot via executive action, but the administration needs help from the House and Senate.

Permanently sidelining the Corporate Transparency Act is one example. The law, which was originally passed in 2021, mandates that small businesses divulge sensitive information about its owners and officers to the government. If entrepreneurs don’t comply with the rule–a regulation in which larger companies are exempt–they could face jail time and huge fines.

Walking back a policy dubbed the “pill penalty” is another. Signed into law during the Biden administration without a single Republican vote, the rule leverages the heavy hand of government to manipulate the free market by favoring certain classes of medications over others. Congress should level the playing field so private business decisions aren’t guided by Washington bureaucrats.

The small business community needs Congress to move on the budget reconciliation package sooner rather than later. While lawmakers technically have until December, the American economy thrives on certainty. And with tax cuts and other policies up-in-the-air, that feeling of certainty is elusive.

Guy Berkebile is the founder and president of Guy Chemical in Somerset, and a partner of the Job Creators Network Foundation.