There are numerous critical issues facing America and Arkansas, yet one of the most important is something you may not have heard much about. If Congress doesn't act soon, small businesses will face one of the biggest tax hikes in history, devastating our families and communities.
Fortunately, Arkansas Sens. John Boozman and Tom Cotton have taken notice and are standing up for Main Street. But they need the rest of Congress to follow suit.
The Tax Cuts and Jobs Act in 2017 gave every kind of business historic relief. Yet while big businesses received a permanent cut to the corporate tax rate, 85 percent of small employers organized as pass-through businesses only received a temporary deduction that expires in 2025.
That's almost a year away, which may as well be tomorrow for Main Street job creators who are trying to plan for the future.
The 20 percent Small Business Deduction helps level the playing field between Main Street and Wall Street. It lets Arkansas job creators--the shops that dot street corners and define communities--deduct 20 percent of their business income every year. All told, this tax cut has saved small businesses billions and counting.
They've poured this money right back into their workers and communities. They've given raises, bonuses, and bigger benefits packages. They've created jobs, which matters because small business creates two-thirds of net new jobs overall. They've invested in new technology and equipment that will keep them competitive. And they've given back to worthy causes large and small. If you've seen a small business' banner at a bake sale or ball game, the 20 percent Small Business Deduction helped make such charitable sponsorship possible.
Take Deborah Matteri, owner of the In Season gift shop in Bentonville. She told me that the "Small Business Deduction allows me to invest in my community and my small business." She specifically said it helps her "donate to charities that help those who can't help themselves," like Northwest Arkansas Children's Shelter, Sunshine School, and Veterans Village. Yet if this tax cut goes away, Deborah will have less to contribute to worthy causes and invest in her business.
I hear the same thing every day from small businesses across the state. Nearly half have told my organization they're already cutting back because they aren't certain about whether the tax cut will survive. They're saving up the money they'll owe the IRS. But they'd rather spend it giving raises and giving back.
That's why Arkansas needs Congress to act sooner rather than later. Further delay means lower wages, fewer jobs, and less investment in our families and communities.
Congress could end this uncertainty tomorrow if lawmakers wanted. The Main Street Tax Certainty Act would make the 20 percent Small Business Deduction permanent. It has bipartisan support in the U.S. House, and support from both Senator Boozman and Senator Cotton in the U.S. Senate. They're standing up for small business. Now small business needs other senators and representatives in Congress to follow suit.
Main Street is counting on Congress' action, especially since Wall Street already has permanent relief. Small businesses need the confidence and stability that come with permanent tax relief. The sooner they get it, the sooner they'll lift Arkansas to new heights.
Katie Burns is state director of National Federation of Independent Business (NFIB) Arkansas.