Main Street Needs Senator Daines’ Tax Cut
By Ronda Wiggers, Montana State Director for National Federation of Independent Business
Montana Main Street businesses, farmers and entrepreneurs have endured a lot the last three years. More than 90% of Montana’s businesses are considered ‘small,’ employing less than 50 people. These small businesses have faced uncertainty, supply problems, and struggled to find enough employees. And now they may face a 20% increase in their federal tax bill.
Every Montanan shops at small businesses, so we’re all affected by this turn of events. Before the pandemic, we benefitted from two years of unprecedented economic opportunity and optimism, and the credit goes to the 2017 creation of the Small Business Deduction (Section 199A), which allows small businesses organized as pass-through entities (sole proprietorships, S-corporations, partnerships, or LLCs) to deduct up to 20% of their qualified business income on their 1040 IRS form.
That gave small businesses the relief they needed to thrive. Small employers responded with investment, innovation, growth, and wage hikes, lifting up our state in incredible ways. It’s impossible to overstate how important the Small Business Deduction was. The Small Business Deduction made it easier for Main Street to compete with Wall Street corporations. Without it, big businesses would have an insurmountable advantage over small businesses.
Tens of thousands of Montana small businesses have benefitted from this common-sense policy. There’s a good chance you know someone who got a bonus because of the Small Business Deduction, or someone who got hired because a small business was able to expand. And while the pandemic and government shutdowns stifled a lot of this progress, the Small Business Deduction helped a lot of Main Street job-creators survive the past three years.
Now, the Small Business Deduction is about to expire, putting tremendous pressure on Main Street. That’s bad enough on its own, but it’s made even worse by the fact that Wall Street’s tax cuts are still permanent. Only in Washington does it make sense to put big business ahead of small business.
Thankfully, one leader wants to right this wrong. Sen. Steve Daines introduced a bill that would make the Small Business Deduction permanent. It’s called the “Main Street Tax Certainty Act,” and small businesses are grateful for his leadership. It deserves to pass as soon as possible.
The sooner this bill is signed into law, the stronger small businesses will be. But if this bill goes nowhere, Main Street will go downhill, very soon and very fast. Instead, we need to make things easier for small businesses – because when Main Street wins, Montana wins.