Meaningful tax reform shouldn’t include repeal of the “interest deduction” for businesses.
Huge portions of the business community— such as 75 percent of new businesses and 80 percent of small businesses — borrow money to keep the lights on and their doors open, or to expand their operations.
Under current tax law, all of the interest on these loans is deductible.
As any business person can tell you, this just makes sense.
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After running a fitness salon in Miami-Dade, I can say with full confidence that without this tax tool, I wouldn’t be in the position I am today.
The interest deduction is important because it gives businesses of all sizes access to the funds they need while retaining control of their businesses and having the flexibility to take the kinds of risks, such as building a new location, hiring new staff, or expanding into new services or products, that are proven to generate economic growth and job creation across the country.
Why would Congress want to get rid of this essential business tool?
The fact is, interest deductibility drives economic growth, and eliminating it would be by definition a tax hike—one that could put at risk the million jobs projected to be created in 2017.
That’s not what the American people elected this Congress and president to do.
Instead of taking on unproven tax schemes that could slow or even reverse the gains the economy has made in recent months, Congress should do this:
It should focus on the kind of tax reform that drives growth by cutting the corporate rate, simplifying the tax code, and maintaining the proper treatment of the interest deduction.