A group of lawmakers recently introduced the Main Street Tax Certainty Act, which would permanently establish a 20 percent pass-through tax deduction for small business owners.
The legislation was introduced by U.S. Sens. Steve Daines (R-MT), John Barrasso (R-WY), Marsha Blackburn (R-TN), Jim Risch (R-ID), Bill Cassidy (R-LA), Roger Marshall (R-KS), Katie Britt (R-AL), Mike Braun (R-IN), Bill Hagerty (R-TN), Chuck Grassley (R-IA), Tim Scott (R-SC), Ted Cruz (R-TX), Roger Wicker (R-MS) and Kevin Cramer (R-ND).
Legislation proponents maintain it would help expand the economy and provide certainty for small business job creators via the permanent 20 percent pass-through deduction – which is slated to expire at the end of 2025. If Congress does not take action, small businesses face a tax hike, which could force reduced wages or the elimination of jobs, per authorities.
“Montana small businesses are the heartbeat of our Montana communities, and providing them much-needed tax relief will help our economy flourish,” Daines said. “Making this tax deduction permanent will help Montana small businesses thrive, create jobs and expand their operations.”
According to officials, pass-through businesses represent 98 percent of all businesses and employ approximately 50 percent of American workers. The legislation ensures millions of small businesses will continue to maintain tax parity with large corporations.
National Association of Manufacturers (NAM) Managing Vice President of Tax and Domestic Economic Policy Chris Netram said the NAM applauds the reintroduction of the Main Street Tax Certainty Act – indicating it would make permanent a crucial tax provision for small businesses as they continue to lead economic recovery.
“Small and medium manufacturers, often organized as pass-through entities, are the backbone of the American supply chain,” Netram said.