WASHINGTON, USA – Permanently extending the 20 percent deduction for 26 million American small businesses from the 2017 Trump tax cuts will supercharge Main Street’s job creation engine – leading to an estimated one million new jobs every year over the next decade and an additional two million jobs in the years that follow, according to a study conducted on behalf of the National Federation of Independent Business.
The surge in new jobs would accompany a boom in economic growth. Because of the 20 percent small business deduction, the study shows GDP would increase by $75 billion every year for ten years and then $105 billion each year afterwards.
The study’s findings demonstrate how the deduction primarily helps Mom-and-Pop businesses – debunking Democrats’ false narrative that this deduction does not help small businesses. In 2021, 77 percent of the households claiming the deduction had an adjusted gross income of less than $200,000.
Ways and Means Committee chairman Jason Smith (MO-08) released the following statement urging the swift extension of the 20 percent small business deduction:
“President Trump and Republicans in Congress are fighting for small businesses and the 81 million Americans they employ. Rebuilding our economy requires helping small businesses and giving them the certainty needed to quickly start investing in their companies and hiring more Americans. The 26 million small businesses who rely on this deduction need the confidence that in less than 12 months their tax rates will not go up to over 43 percent, 20 points higher than such businesses face in Communist China.”
“Until Congress provides that certainty, small businesses will sit on the capital needed to grow. If we swiftly make the 20 percent deduction permanent, more than one million Americans will be able to find a new, better job that supports their family. After a Biden Administration during which the smallest of small businesses cut 288,000 jobs last year, having president Trump back in the White House is a welcome relief for entrepreneurs and workers.”
At Ways and Means hearings, small business owners from different communities across the country, representing different industries, have urged Congress to immediately extend the small business deduction. Most recently, during the first policy hearing of the new Congress, a Georgia small business owner equated the expiration of the deduction with a tax hike that would force job creators to close up shop.
Alison Couch, Georgia small business owner: “If 199A expires, it will feel like a tax increase on small business owners, instead of a sunset of a tax deduction. What you will see as a result of that is the inability to provide raises, the inability to invest in new equipment, inability to really invest in R&D and different things of that nature that are so crucial when you own a small business. Quite frankly, I think that it will cost some small business owners their businesses. I think it is that impactful.”
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