Message to U.S. Senate: Advance the House-Passed Tax Package!

By at 14 March, 2024, 9:30 am

by Karen Kerrigan – 

The Consumer Price Index showed that inflation ticked higher for February (+0.4 percent), which followed an increase in January. Even the White House had to acknowledge that consumers and business owners continue to face challenges.

America’s small business owners are doing all they can to tackle inflationary pressures, but they can sure use some policy support from Washington. Indeed, there is great need for smart tax policy to help them compete, invest, and grow. The Small Business & Entrepreneurship Council (SBE Council) strongly supports the Tax Relief for American Families and Workers Act of 2024 (TRAFWA), as it provides relief and incentives that small businesses need to navigate various ongoing challenges. The bill passed the House in late January. Now, the Senate must take action!

Key provisions within the legislation aim to restore investment incentives that will boost small business competitiveness. Measures such as increased expensing limits, retroactive immediate R&D expensing reinstatement, continued bonus depreciation at 100%, and maintaining interest deductibility are not just numbers on paper; they represent lifelines and capital support that will sustain business viability and economic growth during these uncertain times.

Immediate R&D expensing is particularly crucial in fostering innovation among small businesses, which happen to produce the lion’s share of this activity for our economy. Since this provision  expired, many small companies are facing significant tax increases. In a June 2023 Small Business Checkup Survey, small businesses reported that are being forced to borrow money, pare back operations – including employees and benefits, and cutting back on innovation-generating investments. Of big concern, 19% said their firms may go out of business if expensing is not restored.

Uncertainty and worry extend beyond small firms. Without Senate action, families will also lose an important tax credit if the clock runs out before the tax-filing deadline. The tax package offers reasonable amendments to family-focused credits like those involving children. In general, the bill’s broad yet smart approach to tax policy will help fortify both households and businesses alike, as the path to inflation stabilization remains unclear.

In a January letter sent to Congressional leadership in the House outlining SBE Council’s support of TRAWFA’s passage, I noted our recent “Small Business Check-Up Survey Q4 2023” that revealed 71% of small business owners were bracing their firms for reduced investments, hiring, and innovation efforts in the coming months. Without policy support from Washington, this worry will become reality for many small businesses and local economies throughout our country.

SBE Council urges every member of the U.S. Senate to actively support this pivotal and timely legislation to strengthen our nation’s economy. Senate Republicans must not be hesitant in getting this deal done now given the window is quickly closing for the 2023 tax-filing season. Again, the incentives, if small businesses can take them for 2023 while there is still time, will quickly bolster their viability and competitiveness in the year ahead. If nothing happens, small businesses will find someone to blame, and the White House won’t hesitate to put it on Republicans before November.

Karen Kerrigan is President & CEO of the Small Business & Entrepreneurship Council


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