The National Federation of Independent Business (NFIB) in Ohio has released a report stressing the importance of making the 20% Small Business Tax Deduction permanent. The report warns that Ohio’s 1.1 million small businesses may encounter substantial tax increases if this deduction is not preserved by Congress.
According to the report, maintaining this deduction could prevent a considerable disparity in tax rates between small businesses and larger corporations. Without the deduction, small businesses in Ohio could face a tax rate of 43.1%, substantially higher than the 21% rate for C-Corporations.
Furthermore, the permanence of the tax deduction is projected to yield significant economic benefits for Ohio, potentially adding 43,000 new jobs annually over the next ten years. The state could also experience an annual GDP increase of $2.16 billion over the first decade, with a subsequent rise to $4.46 billion per year beyond 2035.
Chris Ferruso, NFIB Ohio State Director, states: “Ohio’s small businesses create jobs and strengthen our local economy. If Congress allows the 20% Small Business Deduction to expire, a massive tax hike on small businesses will take effect, stifling growth, putting the brakes on hiring, and endangering countless small businesses. With the deduction set to expire this year, lawmakers must act quickly to protect small businesses and the communities they support.”
The deduction, part of the Tax Cuts and Jobs Act of 2017, is credited with enabling small businesses to grow, hire, and raise wages. Without congressional action to make it permanent, the report indicates that nine out of ten small businesses will face higher tax burdens, posing threats to jobs and economic stability.
For further details on the NFIB’s advocacy efforts and to access the Ohio report, visit www.nfib.com/stopsmallbiztaxhike.
