AAHOA President & CEO
The Tax Cuts and Jobs Act provided long-needed relief to America’s small business owners and spurred record-breaking economic growth. The economy grew at an astonishing 4.1 percent during quarter two and exhibits no signs of slowing down. Businesses are using their savings to innovate, expand, and compete on a higher level than they have in decades; contributing substantially to America’s economic revival.
For hoteliers, tax reform continues to be invaluable to growing their businesses. Across the United States hotel owners are capitalizing on their newfound savings by investing in their businesses by capital improvements, hiring new employees, and boosting employee wages and expanding benefits. Business owners are not simply lining their own pockets with their tax savings; instead they are creating jobs, developing their properties, and investing in the local community.
To put this massive growth into perspective, the Bureau of Labor Statistics estimates that the average job growth per month is 215,000. This number is up from the monthly average of 182,000 in 2017 and reflects the positive changes that are happening within the economy, thanks in large part to tax reform. At 3.9 percent, America is seeing its lowest unemployment rate in years.
But there is an expiration date looming over this success. Many of the pro-growth provisions in the tax code are set to expire in 2025. This includes the 20 percent deduction for pass-throughs, the elimination of the Alternative Minimum Tax, and reduced rates for individuals. Temporary tax cuts may help promote growth for the next several years, but losing these provisions will result in serious economic consequences. Consequently, House Ways and Means Committee Chairman Kevin Brady recently announced a “Tax Reform 2.0” package, to prevent economic uncertainty and make these important provisions permanent. Congress recognizes that small businesses can only thrive if they can rely on a consistent, equitable, and predictable tax code. Otherwise, the threat of tax hikes will decrease investments in business development and deeply damage business confidence.
It’s not only businesses that will hurt if Congress fails to make tax cuts permanent. According to a CareerBuilder report, 58 percent of companies plan to give their employees raises during 2018 and 25 percent expect to increase starting salaries. Tax reform boosted business resources and now American workers are reaping the benefits. If Congress allows these essential provisions to lapse, employees will see their weekly paychecks shrink and their annual tax bill go up.
AAHOA’s 18,000 members know that this is not in the best interest of their business or their employees and are going to make their voice heard on Capitol Hill this month. Hundreds of hoteliers will meet with their representatives to discuss the issues that are most important to them at AAHOA’s 2018 Legislative Action Summit and “Tax Reform 2.0” is sure to be at the top of everyone’s list.
Congress and President Trump proved to Americans that the success of small business is a priority for our nation’s lawmakers in passing the Tax Cuts and Jobs Act. “Tax Reform 2.0” will solidify this priority, and ensure it is a long-term commitment to America’s small business owners.