Op-Ed: Small Businesses Like Mine Need This 2017 Tax Cut To Continue. Washington Must Act.

July 15, 2024

“Our leaders — Republicans and Democrats alike — need to make the Small Business Deduction permanent, and they need to do it as soon as possible.”

Op-Ed: Small Businesses Like Mine Need This 2017 Tax Cut To Continue. Washington Must Act.

CUBA (July 15, 2024) – “The small businesses that anchor our economy are about to face a devastating tax hike that will hurt workers and weaken communities,” writes NFIB Small Business Owner Member Nathan Garden in an op-ed in the Kansas City Star. “As the owner of one of those job creators — a third-generation family-owned manufacturing company in Cuba, Missouri — I’m calling on Washington, D.C., to wake up and protect the tax cut that small businesses desperately need.” In the op-ed, Garden highlights how the 20% Small Business Deduction allowed him to boost wages and benefits, expand his factory and warehouse space, and upgrade his equipment – all of which have helped him remain competitive. CLICK HERE to read the full op-ed. Excerpts are below: Small Businesses Like Mine Need This 2017 Tax Cut To Continue. Washington Must Act. Kansas City Star Nathan Garden July 12, 2024 It says a lot about our politics that very few of our leaders are talking about one of the most important issues. The small businesses that anchor our economy are about to face a devastating tax hike that will hurt workers and weaken communities. […] The tax cut in question is the small business deduction, also known as Section 199A or the qualified business income deduction. […] Basically, this tax cut lets small businesses like mine deduct 20% of our income. Without this relief, the 2017 tax cuts would have almost entirely benefited Wall Street corporations. The small business deduction was designed to help Main Street continue to compete. But there’s a problem. The law’s corporate tax cuts are permanent, while the relief for small businesses is temporary. The deduction expires next year, and if it disappears, job creators like me will find it much harder to hire and grow and stay competitive. […] I remember when I realized how transformative this tax cut is. […] The first thing we did was expand our factory and warehouse space to give us room to keep growing in the years ahead. We also began to upgrade our equipment, to keep us on the cutting edge. But the biggest and best benefits have flowed to our employees. The tax cut has helped us boost starting wages, which are now about 50% higher than they were in 2018. Our annual wage hikes are also 50% higher. We’ve also covered more of our team members’ health insurance costs, while expanding coverage for their families. And since 2018, we’ve been able to offer bigger bonuses than ever before. At first, we doubled them, but since 2022, we’ve tripled our annual bonuses. Without the tax cut, our 100-plus employees wouldn’t be doing nearly as well. Actions like ours are exactly why Congress created the small business deduction — to kick-start a new era of wage growth, job growth, and business growth. Yet that growth will begin to fade if the deduction expires next year. That’s basic math: When your taxes rise overnight by 25%, you have to cut back. For my small business, the first step we’d have to take would be a hiring freeze. We’re currently looking for five full-time employees, but I’m not sure we could hire any of them. We’d probably also institute a wage freeze, since we wouldn’t have the money to keep giving raises. […] Washington can’t let this happen. Our leaders must save the small business deduction before it expires next year. I realize that politicians like to wait until the last minute, but their failure to act immediately is already hurting small businesses. […] Our leaders — Republicans and Democrats alike — need to make the small business deduction permanent, and they need to do it as soon as possible. That means this year, or failing that, first thing next year. My small business and our workers are counting on it. […] Nathan Garden owns Versa Tags, a manufacturing small business in Cuba, Missouri. He’s a member of the National Federation of Independent Business. He was not compensated for this commentary. Background: The 20% Small Business Deduction (Section 199A) allows small businesses organized as pass-throughs (S corporations, LLCs, sole proprietorships, or partnerships) the ability to deduct up to 20% of qualified business income and is scheduled to expire in 2025. The Small Business Deduction was created in the 2017 tax law to bring small businesses’ tax rates closer to that of their large, corporate competitors. In a recent NFIB member ballot, 91% of NFIB members said they supported permanently extending the expiring provisions of the 2017 tax law. According to NFIB’s 2021 tax survey, nearly half of small business owners (48%) reported the uncertainty of expiring tax provisions is impacting their current or future business plans. CLICK HERE to learn more.

Topics:

Economy

State:

Missouri

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