Tax breaks for big businesses, but not small ones? | Opinion

Inflation continues to take a serious toll on employers and families alike.

In a recent study by the National Federation of Independent Business, job creators ranked the cost of supplies and inventories as their second-most pressing problem — moving way up from its ranking as 12th in 2020.

There are many challenges to owning and operating a small business, but nothing exacerbates those challenges like inflation.

Our family-owned businesses are left to make some very difficult decisions: raise prices and risk losing a competitive edge with big corporations, cut jobs and take on more hours, or worse yet, close shop for good.

To add insult to injury, next year, our small business owners will be smacked with a massive federal tax hike with the expiration of the 20% Small Business Deduction.

If Congress fails to act, this tax hike would wreak havoc on our Kansas’ small businesses. Losing the small business deduction could very well be the largest federal tax increase on small businesses in memory.

When Congress passed the Tax Cuts and Jobs Act of 2017, it included a provision allowing small businesses to reduce their taxable business income by 20% —it’s called the small business deduction.

This provision was included to help level the playing field between our small, family-run businesses and big corporations. But the big business tax cuts were made permanent, and the small business deduction wasn’t. This cut is scheduled to expire in 2025.

We know this provision has had a positive impact on communities here in Kansas and across the country.

After the Tax Cuts and Jobs Act went into effect, small business owners reported to NFIB that they put those tax savings to good use, like increasing employee pay, expanding their business operations, and hiring additional employees .

When we empower small businesses to do what they do best, the economy flourishes.

Jobs at risk

Kansas is no exception. In fact, making the 20% Small Business Deduction permanent would create 12,000 new jobs each year for the first 10 years, and 23,000 annually every year after, according to a recent analysis conducted by the accounting firm Ernst & Young and NFIB.

Allowing the small business deduction to expire will leave Main Street businesses behind and at a competitive disadvantage against their large corporate competitors. And as this new analysis makes clear, failing to make the small business deduction permanent also will put millions of jobs and billions in economic growth across this country at stake.

In the past few years, as prices have increased, we’ve all had to adjust our household budgets and learn to live with less. But a tax increase of this magnitude would force small businesses to make drastic cutbacks.

Faced with a larger tax bill and even tighter margins, small businesses would have to hold the line on wages and benefits, halt growth plans, and possibly jobs. Given the tremendous pressure they’re already under, some may be forced to close their doors for good.

Small businesses need stability to succeed. The past four years have been turbulent. With no guarantee this tax provision will be around after 2025, job creators are starting to make tough decisions now to prepare for a massive tax hike later. Failing to act puts millions of jobs and billions in economic growth at stake.

That’s why Kansas small businesses are asking Congress to pass the Main Street Tax Certainty Act.

This bipartisan bill would make the small business deduction permanent – stopping the cycle of uncertainty and providing our Main Street employers with the predictability they need to grow their businesses. Congress must act.

Our small, family-owned farms, ranches, and small businesses are the foundation of our economy. A federal tax hike is the last thing they need. Call your lawmaker in D.C. today and tell them it’s time to pass the Main Street Tax Certainty Act.