Black History Month is a time to celebrate the achievements by black Americans and a time for recognizing the central role of African Americans in U.S. history. With February coming to a close, one can’t help but wonder, what legacy are we creating for future generations to celebrate during Black History Months in the years to come?
With so much modern rhetoric calling for new government programs to combat poverty, we seem to forget that this same government is taxing black entrepreneur’s right into these so-called programs. As other nations pull American companies away with competitive tax rates, the entire American workforce is falling victim to inaction, but those hardships are disproportionately felt by the black community.
For this reason, it is important for us to consider what legacy we are choosing to leave our grandchildren. What foundation are we going to leave them to build upon?
The contributions of future generations of black Americans will be contingent on Congress’s ability to pass policies that cultivate economic growth and open the door to real opportunities for innovation and entrepreneurship. There’s no faster way to get there than reforming the way we tax our nation’s businesses.
According to the Bureau of Labor and Statistics, the current unemployment rate for black Americans is 9.5 percent – almost twice the national average. Poor economic policy is having a disproportionate effect on the black population. It’s no wonder that 66 percent of registered black voters have identified job creation as a national priority.
To this, there is a solution. In order to create jobs and boost employment, we as a country must stop incentivizing job creators to leave in the first place. For that, we must have comprehensive tax reform that sets the corporate rate at a competitive level and simplifies the tax code.
According to a study conducted by The Heritage Foundation, a 25 percent corporate tax rate would have a huge benefit to the American job market. The findings showed that over half a million jobs would be created annually – meaning nearly 80,000 black Americans hired per year. Additionally, the earnings increase caused by this lowered tax would result in a 7 percent increase in average black household income.
Currently, only 5 percent of black business owners hire more than one employee. By simplifying the tax code, these business owners could reinvest the money often spent on tax professionals into their own businesses and create new job opportunities in their communities. If we really want to close the opportunity gap in America, we don’t need another agency from Washington stifling innovation and self-help. We need a system that rewards entrepreneurship and incentivizes businesses to grow and hire.
Fortunately, Washington seems ready to get to work on tax reform, but the starting place matters. In order to stop American companies from relocating abroad, Congress must treat the underlying disease of inversion, not just its symptoms. The first step we need to take is to lower our corporate tax rate to a competitive level. After that, with the threat of inversion alleviated, Americans will have the opportunity to confidently invest and innovate.
Reforming our tax code will restore America’s competitive edge in the global marketplace and create the climate for economic opportunity necessary to spur innovation and ignite the entrepreneurial spirit here at home. When the economy is stable and a person can stop worrying about finding or keeping a job, then they can dream, they can invest and they can invent. The contributions we’ll have to celebrate during Black History Month ten, twenty and a hundred years from now will be shaped by the climate of economic opportunity we’re able to provide black Americans today.