As an Ohio businessman who runs a privately-held, family-owned steel company, I believe that passing the Tax Cuts and Jobs Act (TCJA) is among the most significant actions Congress can take to encourage economic growth. American businesses like ours would be unleashed by this tax reform package to purchase more equipment and hire more employees.
A private company, Majestic Steel USA is beholden to our workers — not to an unknown class of shareholders. We choose to reinvest in our business and grow our workforce. The enactment of this landmark legislation will ensure those decisions are easier for us to continue making. I am deciding to speak out in support of the TCJA, however, not just as a CEO but as a citizen; not just for the future of my company but also for the future of our country. For the last thirty-one years, Washington, DC has remained on the sidelines as our global competitors reduced tax rates for businesses of all sizes. Consequently, America’s corporate rate is now the highest in the developed world.
The United States doesn’t just compete with other countries every four years in the Olympics or in the World Cup — we compete every day in the marketplace. Imagine if we offered sprinters a fifteen-second head start in a track relay. We would lose every single time. Yet, in the race for investment and jobs, we are holding ourselves back with a corporate rate that amounts to fifteen percentage points higher than our competition. Our combined rate of nearly forty percent towers above the average 24.2% rate in the 35 member countries that comprise the OECD. As a result, EY estimates that we lost nearly 5,000 American companies from 2004 to 2016.
The greatest beneficiary of the current tax code is very clearly every other country besides our own.
The competitive disadvantage that is our tax system has proven to be a burden borne by America’s workforce — limiting job opportunities while lowering wages. Achieving a competitive tax system has therefore been an objective long embraced by leaders of both political parties. By simplifying our code, reducing rates across the board, introducing immediate full expensing, and overhauling our outdated international tax system, we can boost our prosperity with bigger paychecks.
Right here in Ohio, the nonpartisan Tax Foundation estimates that provisions similar to the ones passed in the Senate’s version of the TCJA would help create more than 35,000 Buckeye jobs and add nearly $2,500 in after-tax income for middle-class families. Nationally, the version passed in the House would, according to the Foundation’s Taxes and Growth macroeconomic tax model, “lead to 3.9 percent higher GDP over the long term [and] 3.1 percent higher wages.”
I am proud of how much closer President Trump put American families to the pay raise they deserve. But we’re not quite there yet; how Congress votes throughout the course of the next few days will directly determine how prosperous our country will be throughout the course of the next few decades.
Let’s stop competing against ourselves and start competing with the rest of the world.