By Rep. Kristi Noem
One of the most frequent frustrations South Dakotans share with me is that the federal government just isn’t doing much right. In fact, government often makes things harder with rules and regulations that cost money and often times don’t make a whole lot of sense. I’ve been working to change that since coming to Washington, and the House has passed a number of bills that would cut a lot of the burdensome red tape and rules that have been weighing down South Dakota families and small businesses.
One example of that is a vote the House took this week to pass the Small Business Tax Cut Act, which would allow small businesses (those with fewer than 500 employees) to deduct 20 percent from their active business income. To use an easy example, if a business made $100 dollars, they would only have to pay taxes on $80. This would benefit millions of small businesses nationwide and over 20,000 in South Dakota by freeing up cash that could be used to expand, hire more employees or purchase new equipment.
I was disappointed that some of my colleagues across the aisle tried to mislead folks about what this job-creating legislation really was by calling it a give away to the rich and famous. I doubt the over 20,000 small business owners in South Dakota consider themselves ‘rich and famous,’ and they would absolutely benefit from this legislation. Furthermore, there is general agreement that small business tax cuts are good for the economy. The President himself has recognized this, saying that government “can create the conditions for small businesses to hire more people, through steps like tax breaks.”
Small businesses create the most jobs in this country. In South Dakota, nearly a quarter of our population relies on a small business for employment. Giving small businesses more incentive to invest, expand and hire can only help our economy. But I also know it’s not the whole answer. Our tax code remains a complicated mess of more than 73,000 pages, and it has grown exponentially since it was established. We must make it simpler and more competitive. I recently voted for reforms that put us on that path.
These reforms would cut down the complexity of the tax code, reduce our corporate tax rate – which is the highest in the developed world – and close special interest loopholes. I realize that many are nervous about taking on this issue, but I’m hopeful there is enough political will to move forward. One of the main reasons I wanted to come to Congress was frustration with our tax system, and I’m going to keep on fighting to create a better system.
Rep. Kristi Noem is South Dakota’s lone U.S. Representative, elected in November 2010. She serves on the Agriculture, Education and Workforce and Natural Resources Committees.