The Small Business Deduction is set to expire if Congress fails to act
The report highlights a stark contrast in tax rates between small businesses and their larger corporate competitors if the deduction is not made permanent. In Maryland, the C-Corp tax rate would remain at 25.9%, while the small business rate would surge to 42.6%.
However, making the deduction permanent would lead to significant economic benefits, leaving the small business tax rate on a level playing field with its competitors. Additionally, Maryland is projected to gain 42,000 new jobs annually over the next 10 years if the deduction remains in place, including an annual GDP increase of $1.49 billion for the first decade and $3.08 billion per year beyond 2035.
View the report for Maryland here.
“Maryland’s small businesses create jobs and strengthen our state and local economies,” said NFIB Maryland State Director Mike O’Halloran. “If Congress allows the 20% Small Business Deduction to expire, a massive tax hike on small businesses will take effect. Maryland’s small businesses are already seeing a tax increase that was included in the state’s budget, now is not the time to increase taxes on the federal level too. Lawmakers must act quickly to protect small businesses and the communities they support.”
The 20% Small Business Tax Deduction, a key provision of the Tax Cuts and Jobs Act of 2017, has empowered millions of small business owners to expand, hire employees, and increase wages. If Congress does not act to make it permanent this year, nine out of 10 small businesses will face a significantly higher tax burden, threatening jobs and economic stability nationwide.
For more information about NFIB’s advocacy efforts and to access Maryland’s report, visit: www.nfib.com/stopsmallbiztaxhike.
