California voters might not have played a decisive role in selecting each major political party’s 2016 presidential nominee, but we will have the loudest voice on November 8th. As the most populous state in the country, we award 55 electoral votes to whoever wins here – 17 more votes than the next largest state (Texas).
As Secretary Clinton and Mr. Trump travel across our state, they will hear from individuals and owners of businesses big and small that improving the economy is the most important issue this election. With a tax code that hasn’t been updated since 1986, a complete overhaul of our current system is the best place to start.
I have been manufacturing portable medical refrigeration units for the past 3 years. Today, I have 12 employees who are all counting on me to find new customers and keep the business growing. This has become increasingly challenging under our current tax structure for a myriad of reasons.
First and foremost, our tax rate is far too high and convoluted. The U.S. has the highest business tax rate in the Organization for Economic Cooperation and Development (OECD). This has a direct impact up and down the supply chain. Even though some smaller businesses don’t file under this structure, most of us buy and sell products from large companies that do. Any additional costs incurred, in this case a big tax bill, are transferred down the line, and they are ultimately passed on to consumers. The result is higher prices for everyone.
The high rate isn’t the only issue costing American businesses. Complying with a tax system thousands of pages long is expensive. According to a National Small Business Association (NSBA) survey, the federal tax code is so complex that a majority of respondents said they spend more than 40 hours per year dealing with federal taxes. Forty percent report spending in excess of 80 hours per year on federal tax compliance.
In other words, rather than spending an additional two full weeks securing new clients and finding new streams of revenue, small business owners like myself are forced to ignore our daily responsibilities of growing the company to ensure the government gets their share (and so we’re not audited). This is the quintessential double-whammy.
Back in October, I wrote a piece calling on every candidate to layout their specific tax reform plan. While it was encouraging to see most candidates raise this important issue on several occasions throughout the primary campaign season, the time for lofty rhetoric has come and gone. As we move into the general election phase, voters need to receive solid confirmation that enacting tax reform is a top priority.
Modernizing our tax code has had bipartisan support across the country and in Congress for years. It would behoove Ms. Clinton and Mr. Trump to not ignore this trend.
Businesses of every size need tax reform now. This is the only surefire way to grow the economy in the near term. Both presidential candidates should commit to working with Congress to enact comprehensive tax reform in their first 100 days. Candidates will hear this message every time they step foot in California.
Elizabeth Roemer is the president of Roemer Industries – a company that manufactures portable medical refrigeration in San Diego, California.