Rep. Jason T. Smith, U.S. Representative for Missouri's 8th District | Congressman Jason Smith Official U.S. House headshot
Rep. Jason T. Smith, U.S. Representative for Missouri's 8th District | Congressman Jason Smith Official U.S. House headshot
American small businesses may face a significant tax increase if Congress does not act to extend the 2017 Trump tax cuts. The expiration of these cuts could see federal tax rates for small businesses rise to 43.4 percent by the end of 2025. This potential change is causing concern among business owners who have benefited from a 20 percent deduction, which has allowed them to compete with larger corporations.
Ways and Means Committee Chairman Jason Smith (MO-08) stated, "Small businesses in every district and state will pay higher taxes if the Trump tax cuts expire." He emphasized that these tax cuts enabled small businesses to hire more employees, increase wages, and contribute significantly to the economy. According to Smith, high prices and interest rates under the Biden-Harris Administration have already made it difficult for small businesses to operate.
The Main Street Tax Team, led by Rep. Lloyd Smucker (PA-11), along with Ways and Means Republicans, has been actively engaging with small business owners across the country. They have conducted over 120 listening sessions in 20 states to understand the challenges faced by these businesses due to potential tax increases.
Tom Tredway, a family-owned manufacturer from Pennsylvania, expressed his concerns: "When the 20 percent pass-through deduction expires at the end of 2025... our sector will be disproportionately harmed by the expiration of this deduction."
Rep. Claudia Tenney (NY-24) highlighted how crucial these deductions are for small business owners and farmers in her community. Lana Pol, an Iowa small business owner, mentioned that without this deduction, they would halt investments in equipment and employee development.
Michael Ervin from West Virginia warned that a higher tax rate could lead many businesses like his to close down: "Simply put: ultimately, a 'Closed' sign would go up in my window."
Efforts continue as members of Congress engage directly with local businesses through site visits and roundtable discussions in various states including Texas, Tennessee, Oklahoma, and North Carolina. These meetings aim to gather firsthand accounts of how important the Trump tax cuts have been for sustaining local economies.
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