Cindy Hyde-Smith

10/15/2024 | Press release | Archived content

Opinion: Owning and operating a small business has never been easy, especially now

Opinion: Owning and operating a small business has never been easy, especially now

Tuesday, October 15, 2024

Jackson Clarion-Ledger

Opinion: Owning and operating a small business has never been easy, especially now

Leah Long, Special to the Mississippi Clarion Ledger

Owning and operating a small business is never easy, but it's especially hard right now.

Inflation is driving up the cost of everything from rent to wages and forcing people to change their spending habits, squeezing profits. And things are about to get even worse unless Congress takes action soon.

The "Tax Cuts and Jobs Act of 2017" included significant tax deductions for American businesses, but it didn't treat all businesses the same. Wall Street's tax deductions were permanent. Main Street's tax deduction, though, is set to expire in 2025.

That's why Mississippi's small businesses are urging their member of Congress to pass another bill, the "Main Street Tax Certainty Act." It would help Main Street by making the 20% small business deduction permanent.

If the deduction is allowed to expire, nine of out 10 small businesses nationwide, including thousands in Mississippi, would see an overnight tax increase. That means they won't have as much money to operate their businesses and invest in their communities. It could be the thing that forces many of them to finally close their doors for good.

That's exactly what Congress was trying to avoid when it passed the 20% small business deduction seven years ago.

Small business owners are anxious right now, anyway. The NFIB Small Business Optimism Index rose 2.2 points in July to 93.7, the highest reading since February 2022. However, this was the 31st consecutive month below the 50-year average of 98. Inflation remains the top issue among small business owners, with 25% reporting it as their single most important problem in operating their business.

Owners can't afford this uncertainty. They won't invest in new equipment or add staff unless they're reasonably confident they can afford it. Right now, though, they can't make long-term plans because they don't know if they'll see a 20% hike in their tax bill in 2026.

Making the 20% deduction permanent isn't simply about giving local businesses a tax break. It's about stopping the cycle of uncertainty caused by temporary extensions. It's about assuring owners they can afford to grow their businesses and support their communities without the fear of financial instability.

Mississippians are fortunate because most of our congressional delegation have already signed on co-sponsors of the "Main Street Tax Certainty Act." They're grateful to Sens. Roger Wicker and Cindy Hyde-Smith and Reps. Trent Kelly, Michael Guest and Mike Ezell for recognizing the need to create an environment that allows local businesses to succeed.

Passing the "Main Street Tax Certainty Act" would make our small businesses stronger. It would reduce a lot of the financial uncertainty making it difficult for owners to plan for the future.

Congress included the 20% business deduction in the 2017 tax bill to give local businesses a fighting chance against their big corporate competitors. If the small business deduction is allowed to expire, that means the 2017 tax bill would have almost entirely helped Wall Street, not Main Street.

Hopefully, Congress will recognize that by helping small businesses, it will help all of us.

Leah Long is the Mississippi director of the National Federation of Independent Business.