Main Street can’t seem to catch a break. Inflation may have eased off, but it’s still driven up the cost of everything from raw materials to rent. North Carolina’s unemployment is only 3.4%, but many small businesses still have job openings they can’t fill.
And they’ll soon see a big increase in their federal taxes unless Congress agrees to stop it.
This is a problem that’s been years in the making.
Seven years ago, Congress passed a bill cutting taxes on America’s businesses, but they didn’t treat all businesses the same. Wall Street’s cuts were permanent. Main Street’s 20% tax deduction will expire in 2025 unless Congress changes its mind and makes the deduction permanent.
That’s why local businesses are asking their members of Congress to support the bipartisan Main Street Tax Certainty Act.
If this deduction is allowed to expire, nine out of 10 small businesses nationwide will see a massive tax hike that would hurt their ability to create jobs and give back to their communities. Some small businesses, including some in North Carolina, may have to close.
That’s what Congress was trying to avoid when it passed the 20% small business deduction in 2017. It said the goal was to help local businesses stay competitive and support their communities.
By declining to make the small business deduction permanent, Congress is raising doubts about what might lie ahead for Main Street. Small business owners plan for things months or years in advance. They need predictability.
It’s hard for them to plan for growth or add jobs if they’re uncertain how much money they’ll have after paying their taxes.
Passing the Main Street Tax Certainty Act would let Congress stop the cycle of uncertainty caused by temporary extensions. It would give small business owners the predictability they need to plan for the future and grow their businesses.
The Main Street Tax Certainty Act enjoys the support of both Democrats and Republicans on Capitol Hill, but only six of North Carolina’s six U.S. representatives have agreed to co-sponsor the bill: Dan Bishop, Chuck Edwards, Virginia Foxx, Richard Hudson, Gregory Murphy and David Rouzer. Ted Budd and Thom Tillis are co-sponsors in the Senate.
North Carolina’s economy is built on its small businesses. According to the U.S. Small Business Administration, small businesses account for 99% of all businesses in the commonwealth. Small businesses are owned by and employ our friends and neighbors. They support local charities and civic organizations. They ensure we have a strong, diverse economy.
We need our entire congressional delegation to support the Main Street Tax Certainty Act and make 20% small business deduction permanent. We need to tell our elected leaders what Main Street means to North Carolina’s economy. We need them to understand that by helping small businesses, they’ll help all of us.
Gregg Thompson is the North Carolina director of the National Federation of Independent Business (NFIB).
