NFIB Pushes for Permanent Small Business Deduction

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Small business owners express concern for the future of the Small Business Deduction.

News Summary

The National Federation of Independent Business (NFIB) is advocating for the permanent retention of the federal 20% Small Business Deduction amid concerns over its potential expiration in 2025. This deduction is vital for around 26 million small businesses across the U.S., helping them remain competitive against larger corporations. With a significant advocacy campaign underway, the NFIB aims to ensure that small business voices are amplified in Congress. Recent polling suggests strong public support for the deduction, underlining its importance for the economic health of small businesses.

Syracuse, NY — The National Federation of Independent Business (NFIB) is advocating for the permanent retention of the federal 20% Small Business Deduction, amplifying concerns about its potential expiration at the end of 2025. This deduction is crucial for approximately 26 million small businesses across the United States that currently utilize it to support their operations and thrive economically.

During a recent appearance on WSYR’s “Syracuse’s Morning Show with Dave Allen,” Josselin Castillo, NFIB Principal of Federal Government Relations, highlighted the significant impact of this deduction on small business competitiveness. Without it, New York businesses could face an effective tax rate of 46%, starkly contrasted with a 31% rate imposed on larger corporations. Such a disparity raises alarm for many small business owners who feel they are not on equal footing with bigger entities.

The NFIB has launched a robust seven-figure advocacy campaign aimed at persuading Congress to act decisively. Public sentiment favors retaining the Small Business Deduction; recent polling data indicates strong support among voters. Notably, 79% believe that the deduction positively affects the economy, while a significant 91% of respondents agree that small businesses rely heavily on it for their operational viability. Moreover, over half of those surveyed expressed concern about the potential economic repercussions if the deduction were to expire, signaling substantial anxiety regarding the future health of small businesses in the region.

The Small Business Deduction was introduced in the 2017 tax law to create a more balanced competitive arena for small businesses against larger corporations, which often benefit from more significant tax reductions. Although the corporate tax reductions established under the same law were made permanent, the future of the Small Business Deduction hangs in the balance. This inconsistency in tax policy has raised questions and concerns among small business owners and stakeholders alike.

Castillo underscored the empowerment that the Small Business Deduction provides to owners, particularly as they navigate the challenges of a post-pandemic economy. Businesses are still recovering from the adverse effects of economic fluctuations, and increased taxes could impede their ability to invest, grow, and create jobs within their communities. The NFIB’s advocacy campaign seeks to ensure that small business voices are heard, emphasizing the urgency for Congress to act in favor of permanent status for the deduction.

With the expiration looming, the NFIB is stepping up efforts to mobilize support among small business owners and their customers, advocating for collective action. The debate around the Small Business Deduction continues as various stakeholders weigh in, debating not only its economic impact but also what its potential expiration would mean for the industry as a whole.

As the expiration date of the Small Business Deduction draws closer, the NFIB’s campaign seeks to raise awareness and stimulate dialogue about its importance. By gathering public support and aligning with small business owners, they aim to present a unified front to Congress. Failure to extend the deduction could exacerbate existing challenges, leading to increased operational costs and potential job losses in the small business sector, which is a vital component of the American economy.

The NFIB’s dedication to making the Small Business Deduction permanent reflects a broader recognition of the essential role that small businesses play in the economic fabric of communities nationwide. As discussions progress, the path forward for the Small Business Deduction remains uncertain, underscoring the need for ongoing advocacy and attention from both business owners and lawmakers.