American business owners can breathe a sigh of relief—comprehensive tax reform has passed. The Tax Cuts and Jobs Act is a historic tax reform package that will bring relief to millions of American businesses. And thanks to House Speaker Paul Ryan (R-Wis.), small business owners won’t have to worry if they can keep their businesses running while paying tax burdens of nearly 40 percent.
The Tax Cuts and Jobs Act is more than just smart legislation. It’s about reviving the American Dream. Just take a look at the industry I represent, foodservice distribution. While it may not be coming up with the latest tech gadget, it’s certainly hard at work, often behind the scenes, making dining out all across America possible. Foodservice distributors serve many family-owned businesses, support their communities, and provide high-quality jobs to their fellow Americans. They deserve to keep more of their hard-earned money in their communities.
With a combined annual sales volume of almost $300 billion, foodservice distributors are vital drivers of the American economy. Each day, they work to make sure that professional kitchens across the country have fresh, high-quality products to serve their customers, whether it’s dinner at your favorite local restaurant, a quick lunch at a national chain, or breakfast at a hospital or school cafeteria. This is no small task.
Foodservice distributors are responsible for maintaining a safe and efficient supply chain, inspecting, tracking, storing and managing every product to ensure safety and peak freshness, each and every time. This is an incredible responsibility, given that 225 million meals are purchased away from home in the United States every single day. Foodservice distributors earn every penny they make. Despite averaging pre-tax profits of 2 percent, foodservice distributors pay their employees well above the national average. For example, foodservice distribution delivery drivers earn average annual wages of $62,854 and receive competitive benefits.
Foodservice distributors, on average, currently pay an effective tax rate of 37 percent. This high rate was a result of our broken, burdensome tax code, which has grown to be unreasonably complex, increasingly unfair and filled with special interest loopholes. Under the old system, American companies were taxed at the highest rate in the industrialized world, and the government took even more from certain businesses like foodservice distributors. As a result, economic growth was not reaching its full potential.
Nowhere is this felt more than by foodservice distributors. In this current climate, distributors are finding themselves at a disadvantage, laying out huge sums of capital to keep up with innovation and the ever rising costs of doing business. While our economy has seen some improvement recently, many hard-working business owners are still not feeling the benefits. There is no better way to spur the economy than driving change that grows local businesses.
The good news is that we are now taking steps to fix this problem. This tax reform package is just the start. Now foodservice distributors can keep more of what they earn. They will be able to reinvest more money in their businesses, continue to adopt the latest industry innovations, all while providing high-quality products to their customers, and in turn, a top-notch dining experience for the American consumer.
So, I extend a heart-felt thank you to Speaker Ryan and Congress for leading the way to pass this vital piece of legislation. Because of you, millions of Americans can continue to build successful businesses, serve their communities, and give their employees a better life. The American Dream is still alive. You helped make that possible.