Great Lakes Wire

In a recent interview with The Steve Gruber Show in Michigan, Jeff Brabant, Vice President of Federal Government Relations at the National Federation of Independent Business (NFIB), shared concerns about a potential tax increase for small businesses. Brabant highlighted the potential impact on businesses that are not structured as C-corporations should the 20% Small Business Deduction not be made permanent.

"The big concern with small business owners is most of your small business owners aren’t C-corporations. The C-corporation rate is permanent and 9 out of 10 small businesses aren’t C-corporations, they are what you call pass-throughs businesses…so if you’re paying individual income taxes, the rates are supposed to go significantly up next year," Brabant stated.

The NFIB's report warns that if Congress does not act to extend the deduction permanently, Michigan’s small business tax rate could increase to 43.85%. This deduction, initially established in the 2017 tax law, aimed to create equality between small businesses and larger corporations. While the corporate tax rate cuts were permanent, the Small Business Deduction was not, leaving small business owners vulnerable to potential tax hikes.

"The Small Business Deduction has empowered small business owners to overcome the economic challenges of the last few years," NFIB reports indicated, emphasizing the deduction's importance to the viability of small businesses.

Further insights on this issue can be watched in the interview.