After first year of filing under the Act using savings to grow, hire, and increase wages
Washington, D.C. (Oct. 2, 2019) – The vast majority of small business owners believe the tax relief legislation passed in late 2017 has had a positive effect on the general economy, according to a recent NFIB survey, The Tax Cuts and Jobs Act One Year Later: Part II. Fifty-four percent of small business owners reported the law positively affected their business and 65% said that the Tax Cuts and Jobs Act (TCJA) positively impacted their personal tax liability.
“Small business optimism has continued a two-year trend of historically high levels and this report demonstrates that passage of the Tax Cuts and Jobs Act has been instrumental for the small business community,” said Brad Close, NFIB’s Senior Vice President of Public Policy. “Following passage of the law, small businesses told us they planned to grow, hire, and raise wages, and this survey confirms they did exactly what they intended, giving the overall economy a boost.”
NFIB surveyed small business owners after the passage of the TCJA and found that a majority of small business owners were optimistic about the law. Most of what owners forecasted about the impact of the law on their business operations came to fruition, with owners using tax savings to invest in their business:
- Twenty-seven percent of owners said they retained funds as higher earnings available to support growth.
- Twenty-six percent reported increasing employee compensation.
- Twenty-six reported increased business investment or expansion.
- Sixteen percent hired additional employees.
- Twenty percent paid down debt obligations.
An overwhelming majority of owners viewed the formation of the Small Business Deduction, created by the law, as important. While many are still not yet familiar with it, 51% of owners say it is a very important provision and another 30% indicate it is somewhat important.
“The vitality of the Small Business Deduction as a part of this law cannot be overstated. It is crucial that Congress makes the deduction permanent so small businesses will have more certainty about the future,” said Close.
This survey was conducted with a random sample of 20,000 NFIB members between February and April 2019. The survey was conducted by mail, with an initial mailing and a follow-up mailing three weeks later. NFIB collected 2,644 usable responses, a 13% response rate. Ninety-three percent of respondents were the owner of the business, 6% a manager.