As small businesses across the United States grapple with economic challenges, the urgency for Congress to make the Main Street 20% tax deduction permanent has become increasingly critical. Currently, this tax deduction is set to expire in 2025 unless legislative action is taken. Gregg Thompson highlights that inflation has significantly increased costs for small businesses, further complicating their financial landscape [a85fdf75].
A recent event hosted by the National Federation of Independent Business (NFIB) on November 20, 2024, in Washington, D.C., brought further attention to this issue. NFIB Senior Vice President Adam Temple and Rep. Lloyd Smucker (R-PA) emphasized the potential negative impact on small businesses and the economy if the deduction is not made permanent. Smucker warned that failing to secure the deduction could lead to the largest tax increase in U.S. history [aa8f57d0].
At this event, Alison Couch, owner of Ignite Accounting & Business Advisors in Harlem, Georgia, spoke about the deduction's widespread benefits compared to other tax credits. She emphasized its crucial role in freeing up cash flow for capital investments and hiring, which is vital for small businesses' growth [9c6368fd].
In North Carolina, where the unemployment rate stands at 3.4%, many small businesses still report having unfilled job openings. This paradox underscores the difficulties small business owners face in attracting talent despite a relatively low unemployment rate [a85fdf75]. The temporary nature of the Main Street tax deduction contrasts sharply with the permanent tax cuts that were granted to Wall Street seven years ago, raising concerns among small business advocates about fairness in tax policy [a85fdf75].
According to Thompson, if the Main Street tax deduction expires, nine out of ten small businesses could face tax hikes, which would further strain their operations. An NFIB survey indicated that 44% of small business owners would delay or cancel capital investments, and 61% would consider raising prices if the deduction expires [aa8f57d0]. The Main Street Tax Certainty Act, which aims to secure this deduction, has garnered bipartisan support; however, only six of North Carolina's U.S. representatives have co-sponsored the legislation, indicating a need for greater advocacy [a85fdf75].
Small business owners like Candice Price and Alison Couch highlighted the deduction's importance for cash flow and growth opportunities, emphasizing that ensuring its permanence would provide much-needed predictability for these owners [aa8f57d0]. Small businesses are the backbone of the North Carolina economy, accounting for 99% of all businesses in the state. The outcome of the Main Street Tax Certainty Act could significantly impact the future of small businesses in North Carolina and beyond, emphasizing the importance of legislative action in support of Main Street [a85fdf75].