By Robert Pembroke
My wife and I have a whole bunch of millennial grandchildren (two) and have yet to see them out manning the barricades for lower taxes. Yet studies have shown that 62 percent of millennials — which is a much higher number than in the past — want to start a small business. So, why aren’t they putting pressure on Congress to pass meaningful tax cuts?
In order for a small business to be successful, it takes a lot more than book learning and a good idea. I think it’s an obligation that we, as successful smallbusiness owners, help the millennials to be successful. They’re going to need three things from us: street smarts, fire in their bellies and reasonable financing. Here’s why:
I recently saw a very interesting discussion of China on a Fareed Zakaria TV show that convinced me that we are in a real battle with China. They want to take away all of our good jobs and are committed, as a nation, to doing just that. They are making unbelievably large investments in research, development and infrastructure.
“Now trust me,” as my grandson would say. The only way we can compete with China is to realize that they have a tremendous disadvantage in taxes. The central government must tax Chinese people heavily in order to pay for the research, development and infrastructure that they require, but also all the “free things” they have promised their citizens.
This is why I am proposing that small-business owners must explain to the millennials that they must have the lowest taxes in the world in order to be competitive. Both parties now say that we must be competitive in taxation with the developed world. I say that we must have a tax system that makes us competitive with Ireland. Ireland’s corporate tax rate is 12.5 percent.
Don’t let anybody fool you: If we don’t somehow get a comApetitive advantage over everyone worldwide in business, China will eliminate all quality American middle-class jobs.
This is why we desperately need the millennials to play a big role in defining our nation’s future other than just fending for themselves. I call on all small-business owners to contact their trade associations and jointly put together a campaign that teaches the millennials how to become successful in owning their own business — and teaches them why it’s necessary to pay low taxes.
The Trump administration has done a good job of reducing our cost of complying with regulations. This is a big advantage when competing with China. Please note: We have not changed the intent of regulations, just the cost of complying. China is just beginning to clean up its environment. Now is the time to pounce and make sure we whip them with smart taxation.
America right now is in the throes of reforming taxes. It just makes me sick to see our politicians playing games with the future of our children. I have observed that our politicians have just two modes of operation: to do what the special interests want and to get reelected.
There was a great editorial in a recent Wall Street Journal. “The Wages of Corporate Taxes” details why a low tax rate will help workers. Economist Kevin Bassett has put together evidence that cutting the tax rate from 35 percent to 20 percent will benefit workers. It’s a must-read.
I am a believer in the economic principles of the Austrian economist Friedrich A. Hayek. He taught me that we need all relevant information in order to make good decisions and that society must make available optimal conditions for citizens to make logical assumptions. It’s up to you, the small-business owner, to see that millennials get all the relevant information, and I believe the millennials will then make good decisions and help us lower corporate taxes.
Robert Pembroke is the chairman of Pembroke’s Inc. and now considers himself on a permanent sabbatical. He can be reached at pembroke894@gmail.com