NFIB is continuing to advocate for tax certainty for small business owners and continuing the fight against proposed tax increases on small business owners. NFIB Vice President of Federal Government Relations Kevin Kuhlman testified before the U.S. House Budget Committee in the hearing “Reigniting American Growth and Prosperity Series: Incentivizing Economic Excellence Through Tax Policy.” Kuhlman testified in favor of extending beneficial tax deductions for small businesses. He also presented a petition with over 21,000 small business signatures opposing problematic tax increase proposals to the Committee.

Small business optimism remains well below the nearly 50-year historical average. Small business owners’ expectations for better business conditions six months from now remain near historic lows. Because of this, Kuhlman explained how Congress can help relieve economic challenges by extending beneficial small business tax provisions.

“Small businesses face a very uncertain tax future that makes business planning extremely difficult,” explained Kuhlman. “Beginning this year, certain business provisions of the Tax Cuts and Jobs Act (TCJA) of 2017 expire or wind down. In 2.5 years, the vast majority of the provisions that benefit individuals and small businesses will also expire. If Congress fails to act, there will be a detrimental and substantial tax increase on millions of small businesses.”

One of the most important provisions set to expire after 2025 is the 20% Small Business Deduction. Fortunately, the Main Street Tax Certainty Act would make the Small Business Deduction permanent. This legislation has been introduced in the U.S. Senate by Senator Steve Daines, and Congressmen Lloyd Smucker and Henry Cuellar will reintroduce it in the U.S. House during the next Congressional work period. Eighty-one percent of small business owners believe the Small Business Deduction is important, and it allows small businesses to invest in their employees, expand their businesses, and create jobs.

“Small businesses received significant tax relief upon enactment of the Tax Cuts and Jobs Act of 2017,” said Kuhlman. “More than three-quarters of small employers are organized as pass-through businesses. Business income is passed through to the business owner’s individual income tax return, where individual income tax rates are applied. These businesses invest much of their post-tax dollars back into their businesses and employees.”

In addition to the importance of making the Small Business Deduction permanent, Kuhlman also spoke on the proposed tax increases on small businesses included in President Biden’s Fiscal Year 2024 Budget Request. In response to the White House proposing tax increases and wrongly characterizing small businesses as “tax loopholes,” NFIB collected over 21,000 signatures from small business owners throughout the country opposing the “Small Business Surtax” and stating that “small business is not a tax loophole.”

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