Small businesses need tax reform to thrive
For nearly 10 years, sweetFrog has been offering customers across the country a unique experience — creating their own frozen-yogurt masterpieces. When our franchise began, self-serve, frozen yogurt was rare, if not unheard of. Now it’s a national sensation that satisfies sweet tooth cravings as a healthier alternative to ice cream and other desserts.
Like many small business stories, sweetFrog represents my reach for the American Dream. Since taking over as sweetFrog’s CEO in 2015, we have built upon our founder’s success. We have been named America’s best frozen yogurt by The Daily Meal and a top new franchise by Entrepreneur magazine — growing the system to more than 340 locations operating in 27 states and in international markets such as Egypt and the Dominican Republic.
As Americans continue to flock to yogurt destinations like sweetFrog, the frozen yogurt industry is set to hit $11.9 billion by 2019. This growth will have a terrific impact on our communities.
Each day, small businesses like mine not only employ and train hundreds of workers but also make invaluable contributions to our local economies. We provide time and resources to nonprofits, schools and youth sports teams, among other organizations — but it’s not just these groups that need support. Franchise businesses like ours also need support, and Congress can deliver it by passing much talked about tax reform.
Tax reform can be an incredibly polarizing issue, which should come as no surprise. Sadly, small businesses often get caught in the middle of partisan skirmishes as both sides of the aisle wrestle to find common ground. Once lawmakers do, however, come together on a solution, small businesses — especially franchises — will see a benefit.
For decades, the most encouraging tax reforms that have passed have done so with bipartisan support, even the small reforms. I’m truly encouraged by the White House’s commitment to tax reform and believe our elected officials of both parties will work together to provide solutions that will help small businesses like mine — not just to score political points. Surely, both parties agree that any changes to the tax system ought to benefit all Americans — especially those on Main Street.
Most importantly, I hope — and two-thirds of Americans would agree — that effective tax rates for small businesses need to be reduced. A flatter and fairer tax rate would be crucial to helping us hire more people and spend on expansions. We also can’t afford the tax complexity we deal with day-in and day-out. Small businesses spend upwards of 1.8 billion hours on tax compliance and nearly $16 billion on compliance costs. Simply put, these numbers are unsustainable. And finally, getting rid of the estate tax would help small business owners — many of which, particularly in the franchise industry, are family businesses.
By working with these reform principles in mind, the White House and lawmakers can give business owners more fuel to continue driving our economic success as a country. Creating more jobs and investing in growth are good things for every community nationwide.
In the coming weeks, Congress will debate facets of tax reform many of us don’t understand. It is my hope, and the hope of millions of other small-business owners across the country, that they will address the significant barriers our tax code creates for businesses of all sizes. Simplifying the tax code and lowering rates will give entrepreneurs and aspiring business owners the momentum to create opportunities and to achieve their version of the American Dream – just as I have.
Patrick Galleher is chairman and CEO of sweetFrog Frozen Yogurt in Richmond. He also is managing partner at Boxwood Partners; a Richmond-based merchant bank.