By the end of 2025, if no congressional action is taken to intervene, U.S. taxpayers will face the most significant tax increase in American history. This is due to the fact that many important provisions of the 2017 Tax Cuts and Jobs Act (TCJA) are scheduled to expire at the end of this year, and as of right now, it doesn’t appear that anyone in power has any particular interest in doing anything about it. The loss of these provisions without any additional safeguards in place would be highly detrimental to numerous Americans across the country.
Brendan McCluskey, President of Trident Builders in Baltimore, Maryland, said, “A competitive tax code promotes a healthy economic ecosystem. The more capital there is for people to invest in their businesses, the more they can hire and make improvements to their office spaces. The more money circulating in the system, the more generous wages they can provide to their employees.”
To help impress upon members of Congress the gravity of this moment, members of the U.S. Chamber’s Small Business Council went to Capitol Hill to meet with congressional offices, share stories about how federal tax policy impacts their businesses and local communities, and urge Congress to permanently extend the pro-growth provisions of the TCJA.
Why the TCJA Matters
Renee VanHeel, Founder and President of Pay It Forward Processing in Cape Creek, Arizona, said, “It is personal, and people don’t always understand that. Small businesses are focused on impact—we focus more on who we can help and who we can give raises to, who we can give bonuses to, who we can raise their commissions to. If they’re doing a good job, we’re willing to pay them. But that 20% deduction is going to make a big, big difference to small businesses and it trickles down into everyday life.”
Their primary intent was to make it clear that they believed the TCJA’s pro-growth reforms should be made permanent. The 20% deduction for pass-through business income provides them with capital for reinvestment in operations and their workforce, and the deduction for research and development (R&D) expenses must be reinstated because it represents an investment in technology and people.
Michelle Mekky, Founder and CEO of PR firm Mekky Media Relations in Chicago, IL, said, “Having a 20% pass-through deduction has let me take my employees on annual retreats for essential team bonding. It’s helped me really provide benefits that I would not otherwise be able to provide. And now, I have a senior team that is with me and continues to need raises, bonuses, paid maternity leave, 4O1K matching… [Not being able to provide those things] is going to severely impact the team that I have and their families and their ability to stay at my company.”
Meeting with Congress
While on Capitol Hill, the team met with lawmakers and staff from House and Senate offices representing Maryland, California, Utah, Ohio, Minnesota, Alaska, Florida, and New York, as well as staff from the U.S. Senate Committee on Small Business & Entrepreneurship. While these meetings were productive, it remains to be seen if these efforts will be enough to properly motivate Congress as a whole.
As Karen Olson Beenken, President and CEO of beverage distributor The Blue Rock Companies in Sidney, Montana, said, “[With a competitive tax code I’ve been able to put more money into our local healthcare organization. We have a foundation that we support in a Cancer Center. We’ve been able to be more competitive on wages, improve our technology, and I’ve been able to buy a truck for my business in our area. We’ve been able to invest in those kinds of things and help our people with better contributions to their retirement plans.”
Smart tax policy is critical for American businesses, and delivering this message to members of Congress was a key priority for the Chamber this year. Through their efforts, more members of Congress now understand the importance of this decision.
