By ROSEMARY ELEBASH
Inflation is taking a toll on local businesses. It drives up costs, forcing owners to raise prices. Higher prices force families to cut back on spending. Unless people buy things, local businesses can’t stay in business.
It’s bad, and unless Congress steps up and takes action, the financial pressure on local businesses will get a whole lot worse.
Several years ago, Congress passed the Tax Cuts and Jobs Act. There was a provision in the bill allowing small businesses to deduct 20 percent of business income from their federal income taxes. It had a big impact on communities here in Alabama by making it easier for local businesses to succeed.
This 20 percent small business deduction wasn’t permanent, though. It’s set to expire in 2025. If that happens, most small businesses will see their tax bills jump overnight.
That means they won’t have as much money to buy equipment, pay workers, or support their communities. Given the tremendous financial pressure they’re already under, some may be forced to close their doors for good.
That’s why Alabama’s small businesses are asking Congress to pass the Main Street Tax Certainty Act. This bill, which has the support of both Democrats and Republicans, would make the 20 percent small business deduction permanent.
Small business owners need stability in order to succeed, but they don’t have it. The NFIB Small Business Optimism Index rose 1 point in June to 91.5, but that was still the 30th consecutive month that the index was below the 50-year average. Owners say their No. 1 problem right now is inflation.
Congress included the 20 percent business deduction in the 2017 tax bill to help these businesses compete with big corporations and national chains, but it made big businesses’ tax cuts permanent. If the small business deduction is allowed to expire, it would mean the bill ultimately fixed things for Wall Street, not Main Street.
By passing the Main Street Tax Certainty Act, Congress can stop the cycle of uncertainty caused by temporary extensions. It can provide small business owners with the predictability they need to grow their businesses and create jobs.
Most of Alabama’s congressional delegation already supports the bill. Katie Britt and Tommy Tuberville are among the co-sponsors of the Senate version of the bill. Representatives Jerry Carl, Barry Moore, Gary Palmer, Mike Rogers, and Dale Strong are co-sponsors in the House.
The Main Street Tax Certainty Act is bipartisan legislation that would bring immediate relief to Alabama’s job creators. It would enable them to grow their businesses, replace old equipment, and hire additional workers. It would help local businesses give to local charities and make their communities economically stronger.
That’s important, because small businesses play a vital role in Alabama’s economy. Remember: When we help small businesses, we help everyone.
Rosemary Elebash is the Alabama director of the National Federation of Independent Business.