The National Federation of Independent Business (NFIB) released a report emphasizing the economic consequences for New Jersey if the 20% Small Business Tax Deduction is not made permanent. The report highlights the severe impact on the 979,000+ small businesses in the state, predicting significantly higher taxes and potential economic challenges if the deduction expires this year.
The report outlines a stark differential in tax rates between small businesses and larger corporations. Without the deduction, small businesses in New Jersey could face a tax rate increase to 50.35%, while the C-Corp tax rate remains at 30%.
The report provides projections of economic gains if the deduction becomes permanent, predicting the creation of 38,000 new jobs annually over the next decade, and annual GDP increases of $2.34 billion for the first ten years, rising to $4.84 billion per year beyond 2035.
Eileen Kean, NFIB New Jersey State Director, stated, “New Jersey small businesses have a lot on their hands with rising costs, burdensome regulations, and an already steep state tax burden. If Congress allows the 20% Small Business Deduction to expire, the massive tax hike will exacerbate the struggle many small business owners face. Congress must act quickly to protect our small businesses.”
The 20% Small Business Tax Deduction is part of the Tax Cuts and Jobs Act of 2017, helping millions of small businesses expand and hire more employees. Without congressional action, nine out of ten small businesses may face increased taxes, affecting jobs and economic stability across the nation.
For more details on the advocacy efforts of NFIB and to access the report, visit NFIB’s website.
NFIB has been advocating for small and independent businesses for 80 years, with a presence in Washington, D.C., and all 50 state capitals. As a nonprofit and nonpartisan organization, NFIB is driven by its members and focuses on supporting small and independent businesses.
