NFIB Vice President of Federal Government Relations, Jeff Brabant, recently appeared on Bloomberg's Talking Tax Podcast to discuss the importance of making the 20% Small Business Deduction permanent. This deduction is set to expire at the end of this year, potentially leading to a significant tax increase for many small businesses in America.

Brabant emphasized how this deduction benefits small businesses by leveling the playing field against larger corporate competitors. He noted that "in 2021, 26 million small businesses [used the 20% Small Business Deduction]. And those are just small businesses as defined by the Small Business Administration." He further added that although some benefits go to larger independent businesses, it has been particularly advantageous for the small business community.

Brabant highlighted potential consequences if Congress does not act. Citing an NFIB survey from earlier this year, he mentioned that over 60% of small business owners would increase prices if the deduction is removed and individual rates rise. Additionally, over 40% might delay or cancel capital investments, while more than 20% could decrease compensation.

The deduction was introduced as part of the 2017 tax law aimed at creating equity between smaller enterprises and larger corporations. If no legislative action is taken by Congress, taxes will increase on over 30 million small businesses at the end of 2025. The Main Street Tax Certainty Act seeks to make this deduction permanent and prevent a substantial tax hike on most American small businesses.

NFIB has been advocating for America's small and independent business owners for eight decades across all states and Washington D.C., remaining dedicated solely to their interests since its founding in 1943.