The recently released tax bill from Republicans in Congress will help Maine’s small business owners and hardworking taxpayers. I should know — I’m a small business owner as well as a state representative.

The vast majority of small businesses in Maine and across the country pay tax at individual tax rates. Under the current tax system, that means they pay a top federal marginal rate of 40 percent; once state and local taxes are added in, Maine small businesses pay nearly 50 percent of their earnings in taxes.

Such overtaxation puts my business and thousands of others like it at a competitive disadvantage with online big businesses like Amazon, as well as with increasing international competitors whose countries’ business tax rates are just a fraction of ours.

While our big business and international competitors can tap funds to expand, hire, and raise wages, small businesses have become an afterthought under today’s tax policy.

This weakening of the nation’s small business backbone has major ramifications for both the state and the country. Main Streets have been decimated, and communities have declined. According to Census Bureau data, Maine is the fifth slowest growing state in the nation over the past six years, with its population stuck at 1.3 million since 2010. And as businesses and people have moved out, social problems like drug use and crime move in. The federal Centers for Disease Control has identified Maine as a state in which opioid deaths are skyrocketing.

The proposed tax bill will bring long overdue relief to Maine’s small businesses, which employ almost 60 percent of the state workforce, reinvigorating the state’s communities and families.

One of the biggest benefits of the Tax Cuts and Jobs Act is the reduction of the small business tax rate from 40 percent to 25 percent. The savings associated with this reform would allow small business owners to expand operations, hire more individuals, and even increase wages for employees. According to a recent nationwide survey of small business owners conducted by the Job Creators Network, most respondents would reinvest their tax savings back into their business in at least one of these three ways. Evidence also shows a clear relationship between reduced business taxes and increased wages.

But small businesses do not need to earn enough to be affected by the reduction in the top marginal tax rate to benefit from the bill. For instance, the bill will double the standard deduction — the portion of income that is not subject to taxation for individual and small businesses that do not itemize deductions — from $12,700 to $24,000. It will also eliminate the 15 percent tax bracket in favor of an expanded 12 percent rate on the next $90,000 of family earnings. These changes will save ordinary Maine small businesses and families thousands of dollars a year which can be used to pay for ever-increasing day-to-day expenses.

The tax bill also allows for the full deduction of interest costs, which makes debt-financed expansion a little more manageable. It also allows for immediate expensing, making expansion and capital investment more attractive.

I held a variety of jobs before entering the Legislature, including owning two restaurants. I have seen the small business tax burden first hand, and am glad that Congress is finally taking action. Small businesses and all state residents should support these efforts to reinforce America’s economic backbone.

Paula Sutton of Warren, a Republican, is a special projects manager at Eastern Traders and represents House District 95 in the Legislature.

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