An encroaching tax hike on America’s small businesses must be stopped, said U.S. Sen. Steve Daines (R-MT) and National Federation of Independent Businesses (NFIB) President Brad Close during a Sept. 25 press conference.
Along with small business owners, they called for the passage of Daines’ Main Street Tax Certainty Act, S. 1706, which would make the 20 percent tax deduction for small businesses permanent.
“This is something we must pass because if we do not do this next year, many of the businesses, the small businesses across America, will face about a 30 percent increase in their taxes,” Daines said. “Now, high tax rates are a barrier for businesses to expand, to hire more employees, and to grow their businesses. We need to make this provision in the tax code permanent.”
The 20 percent small business deduction, section 199A, was created as a part of the 2017 tax cuts to level the playing field between small businesses and large corporations. Without congressional action, nine out of 10 small businesses will be hit with a tax hike when the deduction is set to expire at the end of 2025, the senator said.
“One of the problems in Washington, D.C., is introducing uncertainty based on expiring tax provisions, and that creates a lot of problems for businesses across America,” said Daines. “This is why it’s important that we make these tax provisions permanent so these small business owners behind me aren’t having to worry more about what’s going on in D.C. They have enough to worry about as it is. Let’s not add Congress to their worry list.”
Daines introduced S. 1706 in May 2023. The bill, which currently has 34 Republican cosponsors, has languished in the U.S. Senate Finance Committee since its introduction.
Likewise, the identical H.R. 4721, introduced in July 2023 by U.S. Rep. Lloyd Smucker (R-PA), remains stalled in the U.S. House Ways and Means Committee, despite bipartisan support from 190 members.
“If these provisions expire, you’re going to see a big tax increase, you’re going to see a reduction in economic growth, and in many cases, you’re going to see businesses have to face a very difficult challenge, maybe to let employees go, because they’ve got to pay the tax bill to the IRS,” Daines told the audience. “So, we cannot wait. We need to make these tax provisions permanent.”