WASHINGTON, D.C. – Over the next 10 years, small businesses will increase GDP by $75 billion each year because of the 20 percent small business deduction, and then rise to $150 billion every year after, according to a study released by the National Federation of Independent Businesses.
These figures represent new small businesses, new facilities, and new workers if the 20 percent small business deduction is extended. The growth generated by extending the Trump tax cuts would also result in small businesses creating an additional 1 million jobs every year over the next decade and an additional 2 million jobs in the years that follow with the continuation of the policy.
Ways and Means Committee Chairman Jason Smith (MO-08) urged Congress to quickly extend the Trump tax cuts to help small businesses:
“Small businesses all over the country have testified before the Ways and Means Committee about the need for tax relief after four difficult years under the last administration. In the last year of the Biden Administration, small businesses were forced to cut 436,000 jobs. Delaying an extension of the Trump tax cuts would just add insult to injury by leaving small businesses in limbo about whether their tax rates will go up to 43.4 percent in just a few months. Congress must provide certainty to the 26 million small businesses who rely on the 20 percent small business deduction that tax relief is on the way. This will bring about investment and growth in our economy right now instead of waiting until next year. The Ways and Means Committee is committed to delivering on President Trump’s mandate to extend his successful tax cuts and usher in a new golden age of American prosperity for small businesses, workers, and farmers.”
Hearing From America
Witnesses at a recent Ways and Means hearing urged Congress to quickly extend the Trump tax cuts. One of the witnesses, a Georgia small business owner, explained the high stakes for small businesses potentially losing the 20 percent small business deduction.
Alison Couch, Georgia small business owner: “If 199A expires, it will feel like a tax increase on small business owners, instead of a sunset of a tax deduction. What you will see as a result of that is the inability to provide raises, the inability to invest in new equipment, inability to really invest in R&D and different things of that nature that are so crucial when you own a small business. Quite frankly, I think that it will cost some small business owners their businesses. I think it is that impactful.”
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