Two years ago, Congress passed a new tax law with key provisions affecting small business. Tax cuts in that law designed to help small and independent business owners are having the intended impact of fueling growth and optimism throughout the country.
Members like Kathy Peterson of Heartland Seating Inc. in Kansas are reporting how the deduction is helping. “The federal Tax Cuts and Jobs Act of 2017 helped me grow my small business,” she explained. “With the money I saved, I was able to add four positions, offer raises and bonuses to many of our existing employees, and invest in a new database that allowed my company to expand from five states to six.”
As we hit the two-year anniversary of passing the landmark tax law, we’ve been hearing similar stories from thousands of members who’ve been taking advantage of the Small Business Deduction, which allows small enterprises to deduct up to 20% of their qualified business income under section 199A of the tax code. The extra cash has freed up capital for the kind of business investments that drive economic growth.
Two out of three members told us their personal tax liability has gone down, and 83% have recognized that the cuts have been a boon for the overall economy. We worked hard to convince lawmakers of the importance of supporting small business – the backbone of the economy. It has been a huge win for NFIB and its members.
Unfortunately, we’re going to have to keep up the pressure. The Small Business Deduction will expire in 2025 unless we can convince Congress to make this successful policy a permanent feature of the tax code. Our message is simple: A vote to make small business tax relief permanent is a vote for a thriving economy.
NFIB members should make a resolution to tell their elected representatives how important it is to their business to keep the deduction. Tell them, if they haven’t already, to co-sponsor the Main Street Tax Certainty Act (H.R. 216 in the House and S. 1149 in the Senate), which would preserve the Small Business Deduction. Good things happen when NFIB members rally around a cause, and we’re looking forward to more wins in the months ahead.
And speaking of looking ahead, all of us at NFIB wish you success in the new year, and a warm and happy holiday season.