Here’s a crisis you haven’t heard about. Next year, America’s small businesses are going to suffer. That includes my pool installation business here in Missouri. We face one of the biggest tax hikes in American history. It will hurt my eight workers and my entire community.
Washington needs to protect the small-business economy and our employees. But instead, our politicians are doing nothing. They need to save small businesses before it’s too late.
All they need to do is make the small-business deduction permanent. It’s the single most important part of the 2017 tax cut law. That law is most famous for giving enormous relief to Wall Street corporations, but the tax cut for Main Street was much more important. It put small businesses on the closest thing we’ve ever had to a level playing field, letting us save 20% on our taxes annually.
The small-business deduction is one of the few bipartisan parts of that law. But Congress didn’t make it permanent. Right now, corporations get tax cuts forever, but small businesses lose our relief next year, at which point our taxes will soar.
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It’s mind-boggling. Small businesses should have gotten permanent relief from the start. We’re the engine of the economy and create the most new jobs by far.
I should know. The moment the small-business deduction went into effect, I was able to grow my business like never before. I started hiring more workers. I started covering 100% of their healthcare costs and offering a Health Savings Account. I was even able to establish a matching 401k plan.
I even had money left over to invest in new equipment, staying competitive both locally and regionally. I’ve been able to buy a new box truck, a new crane truck, and two new service trucks, along with a boatload of new tools.
Without the tax cut, it would have taken me years to afford this. But that’s the difference those 20% savings make.
And the timing couldn’t have been better. With my bigger team and better equipment, my business was ready to meet the insane demand during the pandemic. We were getting calls every day about installing new pools. Before the tax cut, we would have had to turn customers away. But because of the relief, we were able to give a record number of families a chance to have fun at home during difficult times.
We even provided more charity work. Last year, I joined with some other companies to install two pools at local churches. We could do that without making a profit because we had more money from the tax cuts. We couldn’t have done it if our taxes were higher.
But now it’s an open question: Will my tax cut disappear come 2025?
That’s called uncertainty, and as any small-business owner will tell you, uncertainty is the enemy. When you aren’t sure how much you’re going to owe the IRS, you start saving money instead of investing it in your team and your community.
I want to invest and grow and give back. Instead, I’m now holding off on new hires, equipment, and charity.
The worst thing that could happen is if Washington lets the small-business deduction die. The moment that happens, I’m going to face some painful choices. I’ll try as hard as I can not to lay anyone off. But I’ll probably have to raise prices to cover my costs. I may also have to cut back benefits.
None of that’s good for me and my team. But our politicians may leave me with no choice.
They should make a better choice first. All our leaders need to do is make the small-business deduction permanent. They could easily do it before the November election. If not that, they should do it within the first month of next year. They don’t even have to touch the other parts of the tax cut law. They can deal with those later, while saving small businesses now, on a bipartisan basis.
The sooner Washington acts, the sooner Main Street will be saved from the coming crisis.
Wideman owns Wideman Pools in Festus. He’s a member of the National Federation of Independent Business.
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