California Benefit to Extending the 20% Small Business Tax Deduction

FOR IMMEDIATE RELEASE Contact: John Kabateck, California State Director, john@kabstrat.com Tony Malandra, Senior Media Manager, anthony.malandra@nfib.org SACRAMENTO, Calif., Sept. 16, 2024—The numbers in one report alone don’t just impress, they astound. That was the sentiment expressed today by John Kabateck, state director for NFIB in California, in response to two reports released last Thursday showing the big economic gains all states could realize if Congress keeps the 20% Small Business Deduction in the federal tax code from expiring next year as it is scheduled to do. “Prior to the release of EY’s report, Macroeconomic impacts of permanently extending the Section 199A deduction on small businesses, showing the importance to all states’ economies of keeping the 20% Small Business Deduction element of the 2017 Tax Cuts and Jobs Act in place, you could make a compelling case that it was a matter of fairness. That same law made the breaks corporations received permanent. But EY’s report should leave no one in any doubt. The Small Business Deduction benefits everyone.” According to EY (Ernst & Young), “The tax change is estimated to increase US job equivalents at small businesses by approximately 1.2 million jobs, on average, in each of the first ten years and growing over time to 2.4 million each year after that.” On the gross domestic product, “permanently extending the Section 199A deduction is estimated to increase US GDP at small businesses by $75 billion annually, over the first 10 years; and growing over time to $150 billion annually each year thereafter.” The California share of those two calculations (Page 7, Page 9) are 141,000 jobs and $9.7 billion in GDP each year for the first 10 years and 274,000 jobs and $20.1 billion in GDP each year after 2035. NFIB’s Tax Survey found that should the Small Business Deduction expire, 61% plan to raise prices, 44% will postpone or cancel capital investments, 36% will postpone or cancel hiring additional employees, 16% will freeze wages or reduce employee benefits, 10% will become more productive , more efficient, and the remaining would take a variety of other actions. (Page 7) Also last Thursday, Jeff Brabant, NFIB’s vice president of Federal Government Relations, testified before the Senate Committee on Finance, concluded his remarks with, “Members of Congress should ask themselves if they really believe it when they say, ‘small businesses are the backbone of America.’ If they truly believe that statement and value small businesses in their communities, then making the 20% small business deduction permanent should be an easy decision.” The typical NFIB member employs between one and nine people and reports gross sales of about $500,000 a year. NFIB’s latest Small Business Economic Trends report can be read here and its latest Jobs Report here. Keep up with the latest California small-business news at env-nfibcom-uat.kinsta.cloud/CA. Follow us on X @NFIB_CA and on Facebook, https://www.facebook.com/NFIB.CA ### For 80 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com. NFIB California 915 L St. Ste C-411 Sacramento, CA 95814 916-448-9904 NFIB.com/CA Twitter: @NFIB_CA

Topics:

Economy

Taxes

California Benefit to Extending the 20% Small Business Tax Deduction

Related Articles