The Sconi

The National Federation of Independent Business (NFIB), an organization supporting small businesses, has published a report on the implications of a potential legislative change on Wisconsin's economy. The focus is on the 20% Small Business Tax Deduction, which is at risk of not being extended, affecting over 481,000 small businesses in Wisconsin. Failure to make this deduction permanent could lead to significantly higher tax burdens for these businesses.

If the deduction expires, small businesses could face a tax rate increase to 47.25%, compared to the current C-Corp rate of 28.9%. In contrast, making it permanent would equalize the tax conditions for small businesses, potentially resulting in substantial economic benefits such as 25,000 new jobs annually in Wisconsin over the next decade. Additionally, the state's GDP could increase by $1.27 billion each year for ten years, with further growth predicted beyond 2035.

Bill G. Smith, NFIB Wisconsin State Director, commented, “Wisconsin small businesses face a massive tax hike if Congress allows the 20% Small Business Tax Deduction to expire. Small businesses are the backbone of our communities, and the deduction helps them grow and further invest in our local economies. Congress must make the Small Business Deduction permanent and level the playing field for the small business community.”

The 20% Small Business Tax Deduction, part of the Tax Cuts and Jobs Act of 2017, plays a crucial role in helping small business owners expand their operations. Its expiration would result in higher taxes for nine out of ten small businesses, potentially threatening jobs and economic stability across the country.

For more details on the NFIB's initiatives and to view the full report for Wisconsin, interested parties can visit the NFIB's website.