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Pennsylvania Advocates Push for Permanent Small Business Tax Cuts

Small businesses in Pennsylvania play a critical role in the community and economy.

News Summary

In response to National Small Business Week, Pennsylvania’s Chamber of Business and Industry and Americans for Prosperity are urging Congress to make small business tax cuts from the 2017 Tax Cuts and Jobs Act permanent. These cuts include a significant 20% deduction for qualified business income, which has been crucial for small business owners. Failure to extend these provisions could result in average tax increases exceeding $2,300, complicating an already tough economic environment characterized by labor shortages and inflation. This campaign is set against the backdrop of promoting economic growth and stability.

Pennsylvania – In recognition of National Small Business Week, the Pennsylvania Chamber of Business and Industry and Americans for Prosperity Pennsylvania have launched a campaign that calls on Congress to make small business tax cuts, originally established by the 2017 Tax Cuts and Jobs Act, permanent. The campaign emphasizes the urgency of extending these critical provisions, which are set to expire at the end of the year.

The 2017 Tax Cuts and Jobs Act significantly reduced the federal corporate tax rate from 35% to 21%. Among its key provisions, it included a 20% deduction for qualified business income (QBI) applicable to pass-through businesses under Section 199A. This deduction is particularly benefiting millions of small business owners by allowing them to lower their tax liabilities and reinvest in their operations, workforce, and local communities.

The Pennsylvania Chamber highlighted that if Congress does not act to extend the small business tax cuts, taxpayers could face an average tax increase exceeding $2,300 annually. Such a hike could have dire consequences, especially as small businesses are already struggling with workforce shortages and rising costs since the enactment of the original tax law.

Luke Bernstein, President and CEO of the Pennsylvania Chamber, expressed concerns regarding the negative impact that failing to renew these provisions could have on Pennsylvania’s economic competitiveness. He stressed how essential it is for small business owners to have certainty in their tax environment in order to thrive in a challenging economic landscape.

Adding to this urgency, Emily Greene, State Director of Americans for Prosperity Pennsylvania, pointed out that the current economic climate—characterized by record-high inflation—necessitates swift congressional action. This would help to alleviate the financial burden on taxpayers and ensure that small businesses can continue to operate effectively.

As part of the campaign, the Pennsylvania Chamber and Americans for Prosperity plan to release a series of videos showcasing testimonials from business leaders, taxpayers, and policymakers who support the extension of these tax policies. This effort is part of a broader nationwide initiative by Americans for Prosperity, which has committed $20 million to advocate for the pro-business tax provisions established by the Tax Cuts and Jobs Act, representing their largest investment aimed at preserving these essential tax benefits.

The background of this campaign is rooted in the bipartisan 2017 Tax Cuts and Jobs Act, which was designed to spur economic growth. By lowering corporate tax rates and introducing helpful provisions like the QBI deduction, the Act aimed to empower small businesses, which are often seen as the backbone of the American economy. The broad intention was to foster a favorable business environment capable of driving job creation and investment.

Overall, the call for Congress to act is framed within the larger context of maintaining economic health and stability in Pennsylvania and beyond. As small businesses continue to navigate the challenges posed by inflation and labor shortages, the outcome of this campaign could play a crucial role in determining their ability to operate and grow in the coming years.