COLUMN: Congress is helping to open the door for small-business success
Did you know that there are 611,495 small businesses in Colorado that account for 99.5 percent of the state's businesses?
Or that 48.6 percent of employed Coloradans work at small businesses?
National Small Business Week (April 29-May 5) recognizes the significant impact of small businesses at the state and national level. As a former small-business owner, I can testify to the importance of providing local opportunities and jobs, as well as to the many roadblocks that entrepreneurs and small businesses regularly face from overzealous federal regulators and Washington bureaucrats.
My experience as a small-business owner is a big part of what inspired me to first run for Congress, since much of what is done in our nation's capital directly impacts the ability of small businesses to operate and engage in commerce and for communities to prosper.
Upon my arrival to Congress in 2011, it was apparent that many improvements needed to be made, such as reforming our national tax code and reducing burdensome federal regulations, so that small businesses — the main driver of the American economy — can thrive. Fortunately, over the course of this past year, Congress has achieved many of these objectives.
Now that the Tax Cuts and Jobs Act is officially law, we have a tax code that works for small businesses and American families.
Thanks to this tax overhaul, a 20 percent deduction has been established for the first $315,000 of joint income earned by businesses that are classified as S corporations, partnerships, LLCs and sole proprietorships (the majority of small businesses). This deduction will allow small businesses to use tax savings to increase investment, hire more workers and give its hard-working employees the raises that they deserve.
One little-known benefit of the new tax code is the establishment of the opportunity zone program, which will offer tax incentives to investors who invest in low-income or rural areas that are still struggling to recover from the recession. This incentive for private investment will encourage entrepreneurs to start small businesses in these designated zones, which, in turn, will bring more jobs and commerce to areas that need them most.
The implementation of this program is welcome news for the 3rd District, as opportunity zones will be located in various counties in Western Colorado such as Rio Blanco and Alamosa.
In addition to rewriting the tax code, we have gone to great lengths to reduce duplicative or unnecessary federal regulations that stifle small-business growth, and as a member of the Financial Services Committee, this has been a mission to which I have dedicated much of my time.
A huge roadblock to many entrepreneurs who hope to start and run a small business is often access to capital. This became a major problem under the implementation of the Dodd-Frank Act, which mandated that banks and credit unions be regulated under a one-size-fits-all approach, regardless of size.
Since smaller financial institutions do not have the same amount of staff and resources as larger institutions, they have been forced to spend more time on compliance rather than serving its communities and, more specifically, lending capital to entrepreneurs so that they can start and operate a business.
In response to this issue, I introduced the Taking Account of Institutions with Low Operation Risk Act, which will require financial oversight agencies to tailor regulations to fit a bank or credit union's business model, so that they can better serve small businesses on Main Street. This legislation was recently passed off of the House floor, and I am optimistic that it will be signed into law soon.
Small businesses are the backbone of the American economy and must be allowed to succeed. I have been proud of the progress made over the course of this last year, but I recognize there is still a lot of work to be done. I will continue to advocate for policies that will open the door to success for small businesses in Colorado and nationwide.